This year’s holiday shopping season is set to be a challenging one for retailers.
With fewer days between Thanksgiving and Christmas than in previous years, combined with consumers carrying more debt, competition will be fierce.
Salesforce’s 2024 Holiday Forecast highlights key strategies that retailers must adopt to stay ahead during the November and December shopping period.
Retailers must focus on offering significant discounts, utilizing AI, and finding innovative ways to meet shopper expectations during this shortened and competitive holiday season.
Shopper Behavior in 2024
According to the Salesforce Shopping Index, consumers are becoming increasingly price-conscious.
Around two-thirds of global shoppers say prices will be the deciding factor in where they shop this holiday season, a sharp increase from 46% in 2020.
With more than 43% of consumers carrying higher debt levels than last year, many are holding out for major sales events, such as Cyber Week, before making large purchases.
To respond to this price sensitivity, retailers will need to implement more aggressive discounting strategies. Salesforce predicts that global discount rates will hit their peak during Cyber Week, averaging 28%, with U.S. rates expected to reach as high as 30%.
AI and Data-Driven Solutions
In addition to price discounts, Salesforce highlights the importance of using artificial intelligence (AI) to boost sales and improve customer experiences.
AI-powered tools, such as personalized product recommendations and tailored promotions, can help retailers offer the right deals at the right time, increasing conversion rates.
Caila Schwartz, Salesforce’s Director of Strategy and Consumer Insights, emphasizes the need for retailers to leverage AI and customer data to craft effective marketing campaigns, especially in the shortened holiday season.
AI is expected to influence 18% of global holiday orders this year, equating to $201 billion in sales. Generative AI, in particular, is gaining traction, with over half of shoppers expressing interest in using it for gift ideas, price comparisons, and budgeting.
The Role of Chinese Shopping Apps
Chinese shopping platforms such as Temu, Shein, and AliExpress are expected to play a significant role in this year’s holiday shopping.
Salesforce forecasts that 21% of holiday purchases will be made on these apps. TikTok’s rise in e-commerce is also noteworthy, with a 24% increase in shoppers making purchases via the app since April 2024.
Preparing for Peak Demand
The Salesforce forecast suggests that sales growth will be modest this year, with a predicted 2% year-over-year increase in global holiday sales, reaching $1.19 trillion.
In the U.S., sales are expected to hit $277 billion, also marking a 2% growth. However, with 40% of shoppers saying they plan to buy less than last year, retailers will need to use every tool at their disposal to drive demand.
BOPIS Grows in Popularity
As the shopping season is shorter, retailers are turning to strategies like Buy Online, Pick Up In Store (BOPIS) to offer both speed and convenience.
BOPIS is expected to account for 33% of global online orders during the week before Christmas and Boxing Week, as it provides a cost-effective way to deliver goods quickly.
Retailers must focus on offering significant discounts, utilizing AI, and finding innovative ways to meet shopper expectations during this shortened and competitive holiday season.