Retailers can look forward to digital holiday sales hitting all-time highs, but will also face unprecedented shipping demand.
According to new holiday predictions from CRM technology platform Salesforce, overall global digital commerce will rise 30% year-over-year during the 2020 holiday season (up from 8% growth in 2019). This figure encompasses 34% growth in the U.S. (up from 12% in 2019).
Total digital sales are expected to reach a new record high of $940 billion globally and $221 billion in the U.S. Salesforce predicts this surge will likely result in an acceleration of digital commerce to 18% of total retail sales globally and 30% of total retail sales in the U.S. during the upcoming holiday shopping season. Salesforce also predicts retailers who offer buy online, pickup in store (BOPIS) can help grow their digital revenue by an average of 90% compared to the previous holiday season.
Despite impressive digital growth, Salesforce expects overall holiday sales to be flat, with $5.1 trillion in global holiday sales and $730 billion in U.S. holiday sales.
Examining how this anticipated digital sales boom will impact delivery, Salesforce finds the overall volume of packages that need to make it from a retailer to a customer’s doorstep will likely exceed shipping capacity 5% globally, potentially delaying up to 700 million holiday packages. Approximately $40 billion of COVID-19 delivery surcharges are expected between Nov. 15 and Jan. 15 globally, as shippers prepare for a massive shift to digital commerce.
Salesforce also expects the combination of Amazon’s Prime Day event in mid-October and consumers eager to ensure their packages arrive on time will lead to an earlier start in the holiday shopping season. This earlier demand is expected to shift up to $6 billion of November’s Cyber Week volume in the U.S. and $26 billion globally to the month of October.
However, Cyber Week digital traffic is still expected to grow by 28% year-over-year. Concerns over health and safety, anticipated product scarcity and shipping delays are also expected to contribute to the start of an earlier holiday shopping season.
In total, $280 billion in online purchases are expected to be returned globally—30% of all purchases made. Consumers are also predicted to engage 30% more with service agents this holiday season. While beauty and electronics and gaming will once again be top holiday spending categories in 2020, Salesforce says home furnishings and decor, home fitness and toys will be among the new leading categories this year.
To benchmark holiday performance, Salesforce analyzes aggregated data to produce holiday insights from the activity of over one billion global shoppers across more than 40 countries powered by Salesforce Commerce Cloud and publicly available third-party data sources.