Salesforce has published new data showing holiday retail sales surged to $1.2 trillion globally and $282 billion in the US. However, high returns could dampen overall profit margins.
The report indicates that the better-than-expected holiday shopping season was supported by surges in mobile and social commerce. In addition to increased consumer spending after months of saving in the first half of 2024.
However, shoppers have already sent back $122 billion in merchandise. Both consumers and retailers embraced AI and agents to enhance holiday shopping experiences through product recommendations and personalised order support. This trend influenced $229 billion – or 19% – of all online orders.
“Retailers had a robust holiday season, but a 28% rise in the rate of returns compared to last year is a cause for some concern,” said Caila Schwartz, Director of Consumer Insights at Salesforce. “Retailers who have embraced AI and agents are already seeing the benefits. These tools will be even more critical in the new year as retailers aim to minimise revenue losses on returns and re-engage with shoppers.”
Top Salesforce 2024 holiday shopping insights (Nov. 1 – Dec. 31, 2024)
Salesforce data, based on an analysis of 1.5 billion shoppers and 1.6 trillion page views across the Salesforce Platform. The data highlights trends that shaped the holiday season, including:
Online sales and order growth reached new peaks:
- Online sales reached $1.2 trillion globally and $282 billion in the US.
- This represents a 3% global year-over-year (YoY) increase and a 4% YoY increase in the US.
- Online sales also grew 1% YoY in the European Union (EU).
Retailers harness the value of AI and agents:
- $229 billion of global online sales were influenced by AI and agents in the form of product recommendations, targeted offers, and conversational customer service support.
- 19% of holiday purchases were influenced by consumers engaging with AI and agents, a 6% increase from 2023.
- Retail use of generative AI features like agents increased 25% during the holiday season compared to September and October in 2024.
- Shoppers used AI- and agent-powered chat for customer service 42% more than they did during the 2023 holiday season.
The rate of returns rapidly increases:
- More than $122 billion of global purchases have already been returned, up 28% from last year.
- This increase is partially due to trending consumer behaviours like “try-on hauls” and bracketing. (Buying an extra size above and below your standard size).
- Salesforce projects that retailers will likely see this number grow to $133 billion. This presents an important opportunity for brands to use agents to make the returns process easier and more tailored to specific customer needs.
- New Salesforce survey data suggests that 75% of U.S. shoppers are interested — and one-third are very interested — in using an AI agent to complete returns and exchanges.
Social commerce grows its influence on shoppers:
- Retailers using social commerce strategies saw 20% of global holiday sales generated through platforms like TikTok Shop and Instagram.
- Social media as a traffic-referring channel grew 8% YoY, driving 14% of all traffic to ecommerce sites during the season.
Mobile conversion picks up the pace:
- While global mobile traffic share remained the same YoY (79%). The percentage of orders placed grew to nearly 70%, up from 67% in 2023.
- Mobile orders reached their highest level on Christmas Day, accounting for 79% of all orders, up from 77% in 2023.
- Survey data from Salesforce also found that 79% of US shoppers say a store associate used a mobile device to help them shop in store in the last year.
- Overall, mobile devices initiated $842 billion in global sales and $195 billion in U.S. sales.
Retailers offer modest discounts:
- Average discount rates for the entire 2024 holiday season reached 23% in the US (up 1% year over year) and 22% globally (up 2% year over year).
- The verticals with the highest global discount rates were:
- Makeup (36%)
- General apparel (30%)
- Skincare (28%)
- The verticals with the highest U.S. discount rates were:
- General apparel (33%)
- Health and beauty (29%)
- Home goods and decor (18%)
- While discounts might have been lacklustre for consumers this holiday season, loyalty programmes proved to be promising for customer retention. 72% of US shoppers surveyed by Salesforce say loyalty programs make them more likely to continue doing business with brands.
Data Methodology
Powered by Agentforce, Commerce Cloud, Marketing Cloud, and Service Cloud, Salesforce analysed aggregated data to produce holiday insights from the activity of more than 1.5 billion global shoppers across more than 89 countries. There was a focus on 18 key markets in North America, Europe and Asia Pacific.
This battery of benchmarks provides a deep look into the last nine quarters and the current state of digital commerce. Several factors are applied to extrapolate macroeconomic figures for the broader retail industry.
Enterprise Times: What this means for business
For brands and retailers, Salesforce’s holiday data is an interesting reading. Its data confirms the research trends of other technology vendors, in particular, shoppers’ determination to get value for money this holiday season. As a result, they are relying more heavily on discounts and trading down for lower-priced items.
However, the key trend Salesforce highlighted is retailers tapping AI and agents to increase margins and enhance the holiday shopping experience. Retail remains incredibly competitive. As a result, these tools will increasingly become more essential for retailers going forward. AI and Agents can support retailers to minimise revenue losses on returns and initiate and maintain relationships with shoppers.
Will the rise in returns for fashion also see retailers turn to size recommendation engines such as Makip and augmented reality platforms?
