With 47 per cent of shoppers saying they are buying the same amount as last year, and 40 per cent buying less, holiday sales growth is expected to be softer than in 2023, which increased by 3 per cent YoY, totalling $1.17 trillion.
This year’s holiday shopping season could be especially challenging for retailers as they compete for shoppers with less purchasing power than in past years.
With the fewest number of days between Thanksgiving and Christmas since 2019 and 43 per cent of consumers carrying more debt than they were in 2023, retailers should prepare for an uphill battle in terms of shopper conversion, Salesforce noted in a release.
“This season will be competitive, intense, and no doubt focused on pricing and discounting strategies. It’s never been more important to leverage technology like AI [artificial intelligence] and rely on your customer data for guidance and insight into marketing campaigns-especially the holiday promotional calendar-that keep your loyal customers buying more and buying from you,” according to Caila Schwartz, director of strategy and consumer insights at Salesforce.
The Salesforce Shopping Index analyses global data from more than 1.5 billion global consumers on retail sites using Salesforce products to forecast holiday shopping. These include 29 of the top 30 US online retailers.
Salesforce predicts that 21 per cent of purchases this holiday season will be made on Chinese shopping apps like Temu, Shein, AliExpress and TikTok.
This prediction mirrors these apps’ recent growth: more than one-third (35 per cent) of shoppers report that they’re buying more on these apps in the past three months compared to the same time period last year.
The application to watch most closely this holiday may be TikTok, said Salesforce. Since the last survey in April 2024, there’s been a 24 per cent increase in the number of shoppers who report making a purchase through TikTok.
Two-thirds of shoppers say they’re holding out on making big purchases until Cyber Week, largely because they believe this to be the best week of the season for deals and promotions.
Salesforce is predicting global discount rates will rise briefly in October and peak at an average discount of 28 per cent during Cyber Week. In the United States, the average discount rate is expected to reach up to 30 per cent.
Salesforce expects 18 per cent of global orders during the 2024 holiday season to be influenced by a combination of predictive and generative AI. This amounts to $201 billion in global online sales.
Fifty-three per cent of shoppers surveyed by Salesforce reported interest in using generative AI for inspiring the perfect present. Other reported benefits of the technology include price comparisons and holiday budgeting.
Retailers are also using AI to improve experiences in stores, online, and during customer service interactions.
Quick resolution times and rapid responses are the top two features that matter most to shoppers when interacting with customer service, paving the way for AI chatbots to improve customer satisfaction scores.
AI-embedded site search will drive a nearly three times better conversion rate compared to online shoppers who don’t engage with site search.
Retailers trying to keep prices low will need to find cheaper ways to get products to shoppers quickly. ‘Buy online pick up in store’ (BOPIS) will be a popular retail strategy to meet this need, and is expected to drive 33 per cent of global online orders the week before Christmas and Boxing Week due to the shortened shopping season.
