The upcoming holiday presents challenges for retailers fighting it out through a shopping period with the fewest number of days between Thanksgiving and Christmas since 2019 and with 43% of consumers carrying more debt than they held in 2023.
Data from the Salesforce Shopping Index is consistent with recent reports from retailers that shoppers are especially price-conscious right now. Two-thirds of global shoppers report that prices will dictate where they choose to shop in 2024, up from 46% of shoppers in 2020, with less than one-third prioritizing the quality of the goods.
In the research from the management software developer and services provider, 47% of shoppers said they will be spending the same amount this year as they did in the 2023 holiday season, and 40% said they would spend less. As such, Salesforce expects holiday sales growth to be softer this year than it was in last year, when the gain was 3% versus 2022.
Salesforce predicts year-over-year global sales growth of 2% during November and December with sales growth in the United States increasing at the same rate.
In the Salesforce research, two-thirds of shoppers said they would not make big purchases until Cyber Week, largely because they believe it to be the best week of the holiday season for deals and promotions. The company added global discounting rates will rise briefly in October and peak at an average of about 28% during Cyber Week, and the U.S. average discount rate will reach 30%.
Salesforce pointed out that during Amazon’s 2024 Prime Day event and in the course of major retailer promotions mounted around it, store-runners that meaningfully increased discount rates saw a 3% increase in U.S. sales and positive order volume growth. The result suggests there is pent-up consumer demand, but discounts will be key to unlocking it.
On the technology front, Salesforce expects a combination of predictive and generative AI to influence 18% of global orders during the 2024 holiday season for about $201 billion in global sales. Consumers anticipate encountering the AI technology, with 53% reporting interest in using generative AI to help them find the perfect gift.
At the same time, the competitive landscape is changing and is likely to have an impact on the holidays. Salesforce forecasts 21% of holiday purchases this holiday season will occur on Chinese shopping platforms such as Temu, Shein, AliExpress and TikTok, and such platforms will capture $160 billion in global e-commerce sales outside of China. Some 35% of shoppers report they’re buying more on such platforms during the past three months than they did during the year-earlier period. Since a salesforce survey in April, the number of consumers who have purchased through TikTok has increased 24%, Salesforce maintained.
“This season will be competitive, intense, and no doubt focused on pricing and discounting strategies” said Caila Schwartz, Salesforce director of strategy and consumer insights, in announcing the research findings. “It’s never been more important to leverage technology like AI 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.”
