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Salesforce: Five trends will drive 2024 holiday shopping behavior

holiday spending
Holiday shoppers will use apps and AI.

Holiday shoppers will use technology to obtain the best deals, according to a new Salesforce forecast.

Salesforce has released its 2024 holiday shopping predictions. During the 2023 holiday shopping seasons, Salesforce estimates that online sales reached $1.17 trillion, up 3% year-over-year, with U.S. online sales rising 1% year-over-year to $272 billion

While Salesforce is not yet estimating 2024 holiday sales totals, the cloud computing company is releasing predictions for five broad trends it says will help shape how, why and where consumers shop during the upcoming holiday season:

Chinese shopping apps will take market share

As consumers face uncertainty around rising prices, Salesforce says they are changing shopping habits. Two-thirds of global shoppers report that prices dictate where they choose to shop, with less than one-third prioritizing quality of the goods, creating a conducive environment for Chinese shopping apps. 

According to Salesforce analysis, in the last six months, two-thirds of consumers from Western markets made at least one purchase on Aliexpress, Cider, Shein, Temu or TikTok, with 58% of them citing lower prices. 

More than six-in-10 (63%) Western consumers plan to purchase from Chinese shopping apps during the upcoming holiday season, including two-thirds of millennials and higher number among Western consumers with children. 

Overall, a leading 43% of Western consumers who shopped via Chinese shopping app in the past six month used Temu. However, Shein is most popular among Western Gen Z consumers, with half of this demographic placing an order recently. 

During the 2024 holiday season, Salesforce predicts that Chinese shopping applications will capture $160 billion in global ecommerce market share outside of China. Salesforce advises U.S. retailers to counter competition from Chinese shopping apps by using data and artificial intelligence to start early and create a promotion and discount strategy for the month of November.

Middle- and last-mile shipping puts strain on margins

According to Salesforce, instability in the Middle East negatively affected middle-mile infrastructure with higher container and oil prices in the first half of 2024, while incidents like the collapse of the Francis Scott Key bridge in Baltimore and rising delivery costs have increased the time and cost of last-mile delivery.

Salesforce predicts retailer and brands will incur an extra $197 billion in middle- and last-mile expenses, increasing 97% over 2023. However, free shipping offers are a top-three reason why consumers choose to make a purchase from a particular brand or retailer, and more than half of shoppers say they are more likely to purchase online than in-store if delivery is free.

Therefore, Salesforce advises retailers to make reduced or free shipping standard practice during the 2024 holiday season. However, they should motivate shoppers to buy online and pick up in store, lowering costs and potentially increasing basket size, as well as consider some kind of incentive for making returns in stores rather than mailing them back. 

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Shoppers embrace AI to search for gifts

During the 2023 holiday season, Salesforce estimated that 17% of online purchases were influenced by predictive and generative AI, totaling $199 billion of online sales worldwide in November and December. 

In the upcoming holiday season, Salesforce says consumers will increasingly leverage AI, knowingly or not, to search for the right gift at the right price. More than half (53%) of shoppers surveyed said they are interested in using generative AI for inspiring the perfect present.

In 2024, Salesforce advises that generative AI search is poised to bring significant changes to consumer expectations and experiences. For example, as Google embeds generative AI into its search product, consumers will adopt and act in more conversational ways when they search online. 

This means retailers can transition from keyword searches to natural prompts to find products on their websites. As retailers increasingly embed AI into search experiences, Salesforce predicts search will drive a nearly 3x better conversion rate compared to traffic not engaging with site search. 

Salesforce advises retailers to break down data silos and harmonize data across their applications to take advantage.

Black Friday becomes Cyber Friday

In 2023, Salesforce estimated that Black Friday gained back 4% of online holiday sales, establishing itself as the biggest online shopping day of the year. The company expects the same result during upcoming holiday shopping season. Two-thirds of shoppers say they’re holding out on making big purchases until Cyber Week, anticipating better deals as 65% say Black Friday has the best discounts of the year. 

Salesforce research shows consumers will continue to use online shopping on Black Friday, with 72% preferring to shop online. The company predicts online sales will take 7% of in-store sales during Black Friday 2024. 

In response, Salesforce advises retailers to focus their Cyber Week efforts on preparing their website and social channels for heavy Black Friday traffic.

Retailers tap loyal shoppers to avoid skyrocketing digital marketing costs 

During the 2024 holiday season, Salesforce predicts that two out of five holiday purchases will be made by a loyal repeat buyer. Retailers are advised to use loyalty data, including shopper profiles, preferences and purchase history, and make it all accessible to store associates, call center agents, and the consumers themselves. 

Retailers can then incentivize loyalty members by offering exclusive perks like free expedited shipping, free gift wrapping, early access to sales and exclusive merchandise.

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