This year’s holiday shopping season is set to be especially challenging for retailers as they contend with shoppers facing reduced purchasing power.
With the fewest days between Thanksgiving and Christmas since 2019 and 43% of consumers carrying more debt than in 2023, converting shoppers into buyers will be an uphill battle.
New data from the Salesforce Shopping Index reveals that price is a top priority for shoppers this year. Two-thirds of global shoppers report that price will dictate where they shop, while less than one-third prioritize the quality of goods.
To attract these deal-seeking consumers, retailers can leverage strong discount strategies and use AI to enhance operational efficiency, deepen customer relationships, and drive higher margins.
AI-powered personalization, such as tailored product recommendations and promotions, will be crucial in delivering the right offer at the right time.
“This season will be competitive, intense, and focused on pricing and discounting strategies,” said Caila Schwartz, Director of Strategy and Consumer Insights at Salesforce.
“It’s never been more important to leverage technology like AI and rely on 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.”
Salesforce’s analysis, based on data from more than 1.5 billion global consumers, provides key forecasts for the 2024 holiday season, running from November 1 to December 31:
Modest Sales Growth Expected
With 47% of shoppers indicating they will buy the same amount as last year and 40% buying less, holiday sales growth is expected to be softer than in 2023, which saw a 3% year-over-year (YoY) increase, totaling $1.17 trillion. Salesforce predicts a 2% YoY global sales growth for November and December, reaching $1.19 trillion, with U.S. sales expected to increase by 2% to $277 billion.
Impact of Chinese Shopping Apps
Chinese shopping apps such as Temu, Shein, AliExpress, and TikTok are expected to account for 21% of holiday purchases, reflecting their growing influence. Notably, the number of shoppers making purchases through TikTok has increased by 24% since April 2024.
Discount Strategies to Drive Demand
Two-thirds of shoppers plan to hold off on major purchases until Cyber Week, anticipating the best deals of the season. Salesforce predicts that global discount rates will peak at an average of 28% during this period. The success of 2024 Prime Day, where increased discount rates led to a 3% rise in U.S. sales, suggests that consumer demand is strong and discounts will be key to unlocking it.
AI Enhances Shopping Experience
AI is set to influence 18% of global orders during the 2024 holiday season, amounting to $201 billion in online sales. Over half of shoppers expressed interest in using generative AI for tasks like finding the perfect gift, comparing prices, and budgeting. Retailers are also employing AI to improve in-store and online experiences, with AI chatbots expected to enhance customer service satisfaction by providing quick resolutions.
BOPIS Strategy Gains Traction
To keep prices low and delivery speeds high, retailers are increasingly turning to Buy Online Pick Up In Store (BOPIS) strategies. This approach is anticipated to drive 33% of global online orders during the week before Christmas and Boxing Week, particularly given the shortened shopping season.
