The past Cyber Monday and Black Friday season brings a whirlwind of shopping activity, with trends shaping how consumers spend and retailers earn. Salesforce data sheds light on these patterns and reveals insights into shopper behavior and retail strategies. This year, the focus is on digital transformation, AI’s rising influence, and evolving consumer preferences.
Dive into the key trends defining this holiday crunch time, or check out insights from Salesforce data collected from 1.5 billion shoppers on the Salesforce Customer 360 platform here.
Surges and Flattens in Online Sales
Globally, online sales ticked up by 1% year over year after Cyber Monday and hit $399 billion. This slight growth points to a resilient, albeit cautious, global consumer base.
Since November 1, online sales in Europe have grown 6% YoY, while online sales in the United States have grown 1% YoY. Moreover, strong sales were noted at the end of Nov. 2023. However, it did not push December’s growth beyond the flat line.
However, success in retail is not just a story about numbers.
Retail is also about timing and strategy. Retailers that hit discounts on Black Friday and Cyber Monday saw increases, and highlighted the power of well-timed deals.
The Rise of Buy Online Pick Up In-Store (BOPIS)
Buy Online Pick Up In-Store (BOPIS) is a shift to convenience. It has become a go-to for holiday shoppers. Its appeal? Skipping lines and beating shipping deadlines.
Salesforce data reveals a notable jump in BOPIS popularity. They reveal that over the three weeks immediately following Cyber Monday, BOPIS accounted for 24% of all online orders placed. It also reached 28% of all online orders made over the weekend of December 16.
This means that BOPIS was the preferred choice for nearly one-third of online holiday sales.
As Christmas week approaches, BOPIS isn’t just convenient – it is essential to meet customer expectations. After the shipping window closes, the hope is still to pick up the goods in the store.
AI: The Silent Sales Booster
There is a lot of talk about artificial intelligence: that it improves the user experience, suggests good product recommendations, streamlines the customer’s journey through the site, learns shoppers’ behavior, anticipates their needs, etc. So, artificial intelligence isn’t working exclusively behind the scenes of stores. It is in the foreground, right next to the customer, and helps them reach the final purchase.
Not surprisingly, it influenced as much as 17% of all online orders from November 1 to Christmas.
What’s more, Salesforce predicted that artificial intelligence would influence as much as $194 billion in holiday sales. Either way, AI’s role in guiding shoppers to checkout is undeniable.
The Returns Tsunami
Returns more than doubled after Cyber Week. You may think – all right, there was a good sales opportunity, the customer bought the product but nevertheless, it did not suit them, so they returned it. What’s the problem?
Well, this spike isn’t just about changing minds. It is about changing buyer behavior. It reflects a more discerning, considerate, meticulous, and conscious consumer, keen on value.
There were predictions by the end of 2023 that Christmas purchases worth more than $131 billion would be returned.
This trend signals thoughtful spending. Consumers are increasingly thinking longer about their purchases and comparing multiple alternatives. They spend more time making decisions and return those products that aren’t worth their money.
Thus, what you need are easy returns with seamless fulfillment. Retailers excelling in these areas are set to boost loyalty and profitability, and can extend their competitive edge.
Discount Dynamics
The Cyber Week discount madness once had to give way to more moderate reductions. Therefore, after a week, the average discount dropped from 27% to 18% and indicated a shift from aggressive price cuts to more thoughtful, long-term offers.
What categories reigned supreme during the reductions?
- Home furniture 25%
- General apparel 24%
- Beauty skincare 23%
Home furniture, general apparel, and skin care. These topped the discount chart and showed consumers where to find the best deals. What’s more, they also contributed to the highest engagement.
Emerging Payment Trends
Mobile wallets surged up 47% globally during the three weeks following Cyber Monday. They continue to see high adoption and underscore a move towards convenience and security in transactions.
Moreover, we saw a rise in the Buy Now Pay Later method. In the U.S., this option experienced a 4% increase Year over Year. Such an uptick reflects a growing preference for flexible payment solutions among holiday shoppers.
Mobile Shopping Dominates
What about mobile shopping? As they are associated with speed, accessibility and convenience as well, they too grow in popularity.
Online buyers know this and are taking advantage of the opportunity to shop on their phones. That’s why mobile devices accounted for 75% of digital traffic during the three weeks following Cyber Monday. They further cemented their status as the main destination for holiday shopping.
This dominance underscores the need for mobile-optimized shopping experiences. Those companies that provide intuitive apps, fast-loading pages, easy navigation, and product transparency can certainly expect more interest and time spent on the app.
What Does This Information Bring to Retailers in 2024?
Shortly speaking: the insights from the past holiday season offer a glimpse into how retail might evolve in 2024.
- The rise of BOPIS showcases a clear consumer preference for convenience and immediacy. This trend is likely to spur more retailers to integrate and streamline their online and physical store operations.
It’s a win-win: customers enjoy the ease of online shopping with the instant gratification of picking up in-store, while retailers can reduce shipping costs and increase foot traffic.
- The influence of AI on shopping habits signals that technology will continue to play a crucial role in how consumers discover and decide on products. Retailers might invest more in AI to personalize shopping experiences, predict trends, and manage inventory more efficiently.
It’s a win-win: This technology becomes a bridge between data insights and consumer needs, and leads to more tailored and engaging shopping experiences.
- The returns trend highlights a need for retailers to focus on quality and customer satisfaction. High return rates can significantly impact profitability.
It’s a win-win: Retailers might use these insights to improve product descriptions and offer better sizing guides to help customers make more informed decisions pre-purchase, thus reducing the likelihood of returns.
- Discount dynamics observed suggest that while heavy discounts can drive short-term sales, they are not a sustainable strategy for maintaining profitability and value perception.
It’s a win-win: Retailers might become more strategic with discounts, possibly leveraging AI to offer personalized discounts that encourage loyalty without eroding margins.
- The payment trends, including the rise of mobile wallets and Buy Now, Pay Later (BNPL) options, indicate a shift towards more flexible and convenient payment methods.
It’s a win-win: This could encourage more retailers to adopt a wider range of payment solutions to meet customer expectations, enhance the checkout experience, and potentially boost sales.
- The dominance of mobile shopping emphasizes the importance of mobile-optimized websites and apps.
It’s a win-win: Retailers might continue to refine their mobile platforms and ensure they’re not just functional but also engaging to capture the attention and spending of the mobile-first consumer.
Last words
In the last holiday season, retail trends revolved around digital savviness, strategic discounts, and consumer-centric approaches. BOPIS, AI, and mobile shopping staples of the modern retail experience.
With convenience, flexibility, technology, and Salesforce’s insights in mind, we can see the direction in which the retail landscape is evolving. In 2024, these trends will likely shape how retailers sell and how consumers shop.
