Don’t expect a holiday sales bonanza: A new forecast from Salesforce projects that total online sales will be flat YoY.
This is partly based on a sluggish first half in retail. But retailers are also facing sinking consumer confidence and excess inventory, the study says.
The study projects a 1% increase in online holiday spend in the U.S., versus 4% globally. The global total should hit $1.19 trillion.
On the positive side (if you want to call it that) personalized, AI-powered marketing promotions, customer service and commerce experiences are expected to bring in $194 billion in global holiday spend. An estimated 17% of shoppers have already used generative AI to make purchase decisions.
Meanwhile, there will probably be a torrent of promotional events in early October, riding off the halo effect of Amazon’s fall Prime Day. Global discounts rates should hit 19% that month.
But consumers will probably hold off until they can get greater discount rates -- up to 29% during Cyber Week, the study estimates.
A fourth of all holiday digital sales will occur during that seven-day period.
Moreover, stricter return policies being put in place by 88% of retailers could slow the start of holiday shopping for those firms. Brands with return windows of 30 days or less will pull 7% fewer online sales in October and November.
Salesforce warns that unclear returns policies will put 21% of online orders at risk.
Overall, it will be a challenging year.
“After a few years of accelerated ecommerce adoption throughout the pandemic, retailers are under pressure to drive sustainable growth and customer loyalty -- while maintaining margins,” says Rob Garf, vice president and general manager, retail at Salesforce.
Salesforce analyzed data from more than 1.5 billion consumers. This indicates that companies need well-planned discounts and updated return policies.
“Despite a slowdown in online spending, brands that activate customer data and insights to execute effective promotions, relevant engagements powered by AI, and seamless experiences across channels will keep shoppers coming back over the holidays,” Garf says.