While online purchases continue to grow, holiday shoppers this year returned to physical stores in greater numbers. In-store retail spending grew more this year than last, with three-quarters of all spending occurring in-person from November 1 through December 20.
According to the Visa Retail Spend Monitor, total retail spend in stores increased by 4.1% this holiday season, up from a 1.6% rise last year. Overall, holiday spending in the U.S. grew by 4.8% compared to 2023.
Online retail shopping also saw continued growth, though the pace slowed compared to previous years. After a 10.3% increase in 2023, Visa reported thatonline shoppers’ spending rose by 7.1% this year.
A similar study from Bain found a comparable trend in holiday retail sales, with in-store sales growing by 2.7% year-over-year, while non-store growth slowed from over 10% to 6.5% this year. This outcome surprised Bain as the global consultancy had predicted in September that holiday spending would rise by just 3%—well below the results Visa ultimately reported.
Surprisingly, many younger shoppers chose the brick-and-mortar route this year. Thomas McMillan, Director of the Center for Retailing Studies at Texas A&M University’s Mays Business School, found an 89% increase in 18- to 24-year-olds planning to shop in stores during the holiday season.
“They want the social experience: going out with friends, grabbing a bite to eat, catching a movie and doing some shopping all in one trip,” McMillan told Texas A&M Today. “It’s reminiscent of the old mall culture, but with a modern twist.”
Fraud Looms
As holiday spending rises, so too does fraud. Visa reports that on Cyber Monday alone, the payments giant blocked nearly 85% more suspected fraudulent transactions globally compared to last year.Overall, suspected fraudulent activity during the first shopping weekend of the season surged by 200% worldwide.
Visa credits the increase in attacks—and the effectiveness in combating them—to the growing use of artificial intelligence. Criminals are adopting more AI tools, which as a result, is enhancing this capabilities. According to recent figures published by Javelin Strategy & Research, AI-powered fraud could result in losses of up to $10.5 trillion by 2025.