Salesforce has unveiled its 2024 holiday shopping predictions. In the 2023 holiday season, online sales were estimated to have reached $1.17 trillion globally, a 3% increase from the previous year, with U.S. online sales rising by 1% to $272 billion. Although Salesforce has not yet provided estimates for 2024 holiday sales, it has highlighted five broad trends expected to shape consumer behaviour.
One major trend is the growing influence of Chinese shopping apps. With rising prices, two-thirds of global shoppers are now prioritising cost over quality. Salesforce analysis reveals that in the past six months, two-thirds of consumers in Western markets have made purchases on platforms like Aliexpress, Cider, Shein, Temu, or TikTok, with 58% citing lower prices as their primary motivation. For the upcoming holiday season, 63% of Western consumers, including two-thirds of millennials and an even higher percentage of those with children, plan to use Chinese shopping apps. Temu was the most popular among these apps, used by 43% of Western consumers, while Shein was favoured by half of Western Gen Z shoppers. Salesforce predicts these apps will capture $160 billion in global e-commerce market share outside China and advises U.S. retailers to leverage data and artificial intelligence to develop early promotional and discount strategies.
The report also highlights that middle- and last-mile shipping costs are straining retailer margins. Events such as instability in the Middle East and the collapse of the Francis Scott Key bridge have exacerbated middle-mile infrastructure issues, while rising delivery costs have increased last-mile expenses. Retailers and brands are expected to incur an additional $197 billion in shipping costs, a 97% increase over 2023. Despite these challenges, free shipping remains a top consumer incentive. Salesforce advises making reduced or free shipping a standard practice and encouraging online shoppers to pick up in-store to reduce costs and potentially increase basket size.
Artificial intelligence is becoming a crucial tool for shoppers searching for gifts. In 2023, predictive and generative AI influenced 17% of online purchases, amounting to $199 billion in sales. In 2024, consumers are expected to increasingly use AI to find the perfect gift at the best price. Salesforce notes that more than half of surveyed shoppers are interested in using generative AI for gift inspiration. As Google incorporates generative AI into its search products, consumers will begin using more conversational prompts, improving the search experience. Retailers are advised to break down data silos and harmonise data to fully exploit AI’s potential.
Black Friday continues to dominate as a critical shopping day. In 2023, it reclaimed 4% of online holiday sales, becoming the biggest online shopping day of the year. Salesforce anticipates a similar outcome in 2024, with two-thirds of shoppers waiting for Cyber Week deals and 65% believing Black Friday offers the best discounts. Online shopping will remain dominant, with 72% of consumers preferring it over in-store shopping. Salesforce recommends that retailers prepare their websites and social channels for the anticipated heavy traffic.
Lastly, loyal shoppers will play a significant role in holiday purchases. Salesforce predicts that 40% of holiday purchases will come from repeat buyers. Retailers are encouraged to utilise loyalty data, including shopper profiles and purchase history, to offer personalised perks such as free expedited shipping, early access to sales, and exclusive merchandise. This approach aims to foster loyalty and maximise holiday sales.
In essence, the 2024 holiday shopping season will be shaped by the strategic use of technology, data, and AI to meet consumer demands and navigate logistical challenges.
itim Group plc (LON:ITIM) is a SaaS-based technology company that enables store-based retailers to optimise their businesses to improve financial performance and effectively compete with online competitors. Itim adds retail value by helping multi-channel retailers optimise their business and their stores to improve financial performance and compete more effectively with the “Amazons”.
