Learn Lessons From Last Year
Learning Objectives
After completing this unit, you’ll be able to:
- Explain the benefits of a holiday retrospective.
- List three key changing holiday dynamics.
- Explain trends in shopper engagement.
- Describe the shift from in-store to online.
Introduction
This holiday shopping season inflation is creating uncertainty about what to expect from shoppers, so plan ahead to maximize your results. The first step: look back at the previous year. A retrospective helps:
- Frame success metrics
- Identify new or continuous patterns of behavior
- Identify opportunities for improvement
By the Numbers
Let’s start by taking a look at last year’s shopping trends by the numbers. Salesforce has access to shopping data from over 1 billion shoppers. They've made over 1 billion visits to sites across 30 countries. This data provides a unique view of shopping trends.
During the 2024 holiday season, increased prices changed how people shop. Our survey reports that 37% of global shoppers used their credit cards more often. Up to 32% of shoppers also turned to alternative credit services, such as "buy now, pay later" options. Also, 43% of shoppers across all income levels carried more debt than in previous years.
Here are the top five trends we found:
- AI recommendations: AI helps shoppers find gifts.
- Chinese shopping apps: Shoppers are planning to use Chinese shopping apps more.
- Middle-mile shipping: Increasing container rates raise shipping costs.
- Black Friday becomes Cyber Friday: Shoppers keep moving from in-store to online purchasing.
- Loyalty: To avoid high marketing costs, retailers engage more with loyal shoppers.
AI Helps Find the Perfect Gift
AI-powered product recommendations and chatbots have revolutionized merchandise discovery and issue resolution. Last holiday season, predictive and generative AI influenced 17% of online purchases, totaling $199 billion in online sales worldwide. This year those numbers are expected to grow as 53% of shoppers polled expressed interest in using generative AI to find the perfect gift.
This holiday season, AI search can transform shopper expectations and experiences in the following ways.
- Retailers tune their website to use keyword-based searches that respond to more natural, conversational prompts and increase sales.
- Store associates use search to provide more personalized product recommendations to in-store shoppers.
- Service agents use AI search to give timely responses to stressed-out shoppers looking for products, orders, and discounts.
- Shoppers can use Agentforce Agent for Guided Shopping for a personalized shopping experience with product assistance, real-time order support, product discovery, and secure checkout.
As retailers continue to integrate AI into their search experiences, Salesforce predicts search to produce nearly three times higher conversion rates.
The lesson: Get ready to use AI by preparing customer data for trusted and secure access, removing data silos, harmonizing data across your applications and setting up Agentforce Agent for Guided Shopping.
Chinese Shopping Apps Gain Market Share
Rising prices have changed shopping behaviors. Two-thirds of global shoppers say prices are the primary factor in shopping decisions, while less than one-third mention quality. This price-sensitive environment has created opportunities for Chinese shopping apps. In the past six months, two-thirds of shoppers in Western markets purchased products on platforms like Aliexpress, Cider, Shein, Temu, or TikTok. This holiday season, Chinese shopping apps are expected to capture $160 billion in global ecommerce market share outside of China.
Retailers must be aware that 63% of Western shoppers intend to buy using these apps. Two-thirds of Millennials plan to use them to purchase holiday gifts. For families with children, the trend is more pronounced.
The lesson: Turn to data and AI like Agentforce Skills for Merchandising to help you craft appealing promotion and discount strategies for November. If your sales don’t start until Black Friday, tell shoppers early, especially members of your loyalty program, to encourage them to wait for the discounts.
Middle-Mile Shipping Increases Retailer Costs
Logistics issues are affecting the middle and last miles of the supply chain. Political instability and rising oil prices have led to increasing shipping container costs. During the first half of the year, this drove up ‌prices for middle-mile infrastructure. Last-mile challenges are piling up too, increasing costs and slowing down delivery times. This holiday season, brands and retailers are expected to face an additional $197 billion in middle- and last-mile expenses, up 97% from ‌last year.
Where possible, avoid passing shipping costs on to shoppers. Free shipping is one of the top three reasons shoppers buy from a certain brand or store. With cost being a primary concern this year, discounted and free shipping are essential for staying competitive.
The lesson: Make reduced or free shipping a standard part of your strategy, but encourage shoppers to buy online and pick up the products in a store. In-store pickup lowers shipping costs and shoppers often buy additional items when they get to the store. Additionally, offer incentives for customers to return items in-store rather than mailing them back. If you consider charging a fee for mail-in returns, remember that this can affect customer goodwill, particularly with your most loyal shoppers.
The Rise of Cyber Week
To wait for the best deals, shoppers are making purchases during Cyber Week. Last year, Black Friday saw a 4% increase in online holiday sales, making it the biggest online shopping day of the year. We expect a similar trend this holiday season. Two-thirds of shoppers surveyed plan to delay purchases until Cyber Week, and 65% say Black Friday offers the best discounts of the year. Not surprisingly, Black Friday is expected to be the biggest day of the year for digital shopping.
Black Friday has switched from in-store to online, with 72% of surveyed shoppers saying they prefer online shopping, while only 31% would rather visit stores. Their top reasons? Convenience, free delivery, and the ability to compare prices. This year, we predict online sales to capture 7% of in-store sales on Black Friday.
The lesson: Prepare your website and social channels for Black Friday traffic. Use your data and AI to create personalized experiences that reward loyal shoppers and convert holiday browsers into buyers.
Brand Loyalty Delivers Results
Customer acquisition is costly for retailers. Digital marketing costs are rising and opportunities to reach the right digital audience are scarcer. ‌As digital marketing costs go up and the competition for the right audience increases, brands and retailers must focus on existing customers.
Customer loyalty programs help. According to our Salesforce Shopping Index, the rate of repeat buyers in the first quarter increased by 8% over the last two years. And shoppers are prioritizing brands and retailers that offer loyalty programs. Earning and redeeming loyalty points is the second-highest factor, behind price, influencing where 46% of shoppers buy. Loyalty points have led to 63% of shoppers making more purchases from stores where they can earn and redeem them.This holiday season, we expect loyal repeat shoppers to account for two out of every five holiday purchases.
The lesson: Make your loyalty data—such as shopper profiles, preferences, and purchase history—accessible to everyone who needs it. This includes store associates, call center agents, Agentforce agents, and shoppers themselves. Offer perks to loyal shoppers like free expedited shipping, early access to sales, gift wrapping, and exclusive merchandise.
Plan a Team Retrospective
Although the next holiday shopping season will certainly be different, it’s still important to understand last year’s trends, because many of them are likely here to stay. Review Salesforce data and insights to prepare for the holiday season. Remember to evaluate your unique storefront experience, too. Meet with your team to review these questions and gain different perspectives on last year’s performance, as well as a fresh look at new ideas.
- What didn’t work during the holiday season?
- Which campaign and promotional tactics were successful?
- How can you align online experiences with offline or in-store experiences?
- What can you do differently with merchandising, marketing, functionality, or retail ops?
- Which metrics can you use to determine holiday merchandising improvements?
Next Steps
Holiday shopping and timing dynamics are ever-changing. We learned a lot from looking back. We learned that online shopping is more prevalent than ever, and that shoppers are increasingly price-sensitive.
We’ve also learned that AI is helping to connect retailers and brands with shoppers. Rising middle-mile costs and Chinese apps provide challenges. Finally, we've learned that building brand loyalty is important. One good way to do this is to give everyone information when they need it and offer benefits and special deals.
With these insights and your company’s unique perspective, let’s learn how to strategize holiday promotions.
Resources
- Salesforce: The New Holiday Retail Planning Guide
- Salesforce: Doing More With Less This Holiday Season? AI Retail Merchandising Can Help
- Salesforce: The Holidays Will Be Different This Year—Here’s How To Measure Your Ecommerce Success
- Salesforce: Shopping Index