By Savyata Mishra and Siddharth Cavale

(Reuters) -Price-conscious holiday shoppers are opening their wallets for last-minute online discounts on clothing and stocking stuffers, potentially benefiting retailers that also offer convenient​​​​ options like free delivery and curbside pickup.

The popularity of online shopping has increased due to its convenience, similar or lower prices than in-store, the availability of services such as “buy online, pick up in-store (BOPIS)” and fast, free delivery, said Michael Schulman, a retail expert at Running Point Capital Advisors.

“This year’s shortened holiday season compared to last year, with a tighter squeeze between Thanksgiving and Christmas, also leaves less time for in-store retail shopping and may have led to more browsing on the phone and computer and buy,” he said.

While there are plenty of deals, retailers appear to be disciplined with promotions. Batas (NYSE: ) and Dollar Tree (NASDAQ: )’s shares rose nearly 3% in midday trading, while Walmart (NYSE: ) was flat.

According to a report by Mastercard (NYSE: ) SpendingPulse, online spending during the holiday shopping period from November 1 to December 24 grew 6.7% last year, compared to a 2.9% increase for in-store sales.

This contributes to a total increase in spending of 3.8% in 2023, surpassing the previously estimated increase of 3.2% and ahead of the 3.1% increase in the same period last year.

Steve Sadove, senior adviser at Mastercard and former Saks CEO and chairman, told Reuters that spending increased even though higher prices due to inflation were the cause. showing “much strength at last.”

With just 27 days between Thanksgiving and Christmas — five fewer than last year — retail executives aren’t exactly happy heading into the holiday season.

They describe their consumers as “selective,” “cautious” and “conservative,” and make “need-based” purchases. As a result, many retailers are doubling down on cutting prices and offering promotions, Bernstein analysts said earlier this month.

Walmart said it will continue to lower prices through rollbacks, while rival Target said it will increase its promotional intensity because shoppers are not as engaged without promotions. Dollar General (NYSE: ) said it expects profits to be squeezed from more promotions in the fourth quarter, while Kroger (NYSE: ) and Five Below (NASDAQ: ) also said that they need to reduce prices to be competitive.

Walmart and Target spent more on ads to reach shoppers on the short-video app TikTok and streaming platforms like Peacock and Hulu during the season, promoting their membership programs that offer quick delivery. and BOPIS.

Some of these efforts seem to have succeeded.

Salesforce (NYSE: ) estimates that the number of BOPIS orders will double in the weekend before Christmas, accounting for almost 40% of all online orders for retailers. And deliveries are also strong, with FedEx (NYSE: ) estimating stronger-than-expected holiday shipping volume last week.

REAL CONSUMER POWER

Huntsville, Alabama native Aireale Hobbs, 40, started Christmas shopping for pajama sets, Stanley drinking glasses, and toys for her family online on Black Friday.

She said she chooses to do most of her shopping online because of the convenience, more options and better deals.

“I was able to get some items from Target at a discount when using the app,” said Hobbs, who works as a front desk clerk at a doctor’s office.

Laptops and TVs with new technology, lower prices and growing acceptance of lab-grown diamonds, and athleisure apparel are also encouraging shoppers to spend this holiday season, although promotions are similar to level last year, said Sadove.

“Promotions are controlled. There are no deep and no intelligent promotions. What we see is a real strength of consumers,” said Sadove, adding that the low unemployment and higher salary buffers personal finances.

Sales in the apparel, jewelry and electronics categories rose 3.6%, 4% and 3.7%, respectively, last year, according to Mastercard. Online sales of clothing, in particular, grew 6.7%, compared to 0.2% in stores.