Salesforce expects the 2024 holiday season to be shorter and more competitive with brands facing the challenge of attracting consumers with less purchasing power. Based on global statistics, around 66% of shoppers plan to purchase based on price this yr, a rise of 20% since 2020. Also, 43% of shoppers are carrying more debt this yr than they did in 2023. Additionally, challenges to the provision chain will proceed to surface.
Brands also face the fewest days between Thanksgiving and Christmas since 2019 and fierce competition from the most important cut-price Chinese shopping apps, Temu, Shein and AliExpress being joined by TikTok and its growing emphasis on shopability.
“Forty percent are buying less but spending the identical,” Rob Garf said of consumers at a press briefing to unveil the forecasts. Garf is VP and GM of retail and consumer goods at Salesforce.
The forecast in figures
Here are the highlights of Salesforce’s predictions:
- YoY online sales growth is anticipated to be more sluggish than 2023, which itself showed only 3% growth YoY. Salesforce is predicting 2% growth, each globally and for the United States.
- Over 20% of purchases this holiday season shall be made on Chinese shopping apps. Look out for TikTok which has seen a 24% growth in shoppers making purchases since April this yr.
- Salesforce expects 18% of worldwide orders throughout the 2024 holiday season to be influenced by a combination of predictive and generative AI, amounting to over $200 billion in global online sales. Over half (53%) of shoppers have an interest in using AI to seek out products.
What brands can do
Salesforce has recommendations for addressing these market challenges:
- Leverage discounts. Two-thirds of consumers plan to attend for Cyber Week after they expect the discounts to be steepest. Prime Day in July saw meaningful discounts generate 3% more sales and a growth in sales volume.
- Use AI to power product recommendations and tailored promotions.
- BOPIS shall be big, driving around a third of orders in the shortened pre-Christmas shopping season as consumers look to get orders filled fast and inexpensively.
Salesforce is anticipating a 28% average discount rate during Cyber Week. “Cyber Week itself has the potential to be a really big week,” said Caila Schwartz, director of consumer insights and strategy, retail and consumer goods.
The Salesforce forecast relies on aggregated activity data from more than 1.5 billion global shoppers across more than 64 countries.
The AI query
“This season shall be competitive, intense, and little question focused on pricing and discounting strategies. It’s never been more essential to leverage technology like AI and depend on your customer data for guidance and insight into marketing campaigns — especially the holiday promotional calendar,” said Schwartz in a release.
That is sensible. But despite much evidence that customers have little trust in AI, Salesforce can be suggesting that using AI to assist consumers find “the right present” is a good idea. It turns on the market is perhaps a quite simple reason why each this stuff may be true.
“They don’t even know in most instances,” said David Oksman, VP marketing and DTC at Samsonite and a guest on the press briefing. “The consumer won’t ever realize it’s based off machine learning.” With an AI-powered suggestion engine embedded in search, the patron is unlikely to know that the products are being surfaced by AI, Garf agreed. What’s critical is a friction-free shopping, ordering and delivery experience.
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