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Forbes
Forbes
23 Aug 2023


A hand holding a smartphone showing a shopping web page

Global online sales are expected to reach $1.19 trillion in November and December, with U.S. online ... [+] sales accounting for $273 billion of that.

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With online sales slowing down, ecommerce retailers will need to use discounts, customer-friendly return policies, and predictive and generative AI tools to win during the upcoming holiday season, according to the holiday forecast released today by Salesforce CRM .

Salesforce expects global online sales to reach $1.19 trillion in November and December, up 4% over last year, but U.S. sales are only expected to grow by 1%, to $273 billion.

Due to the sales slowdown, Salesforce reported, retailers increasingly are turning to AI to reduce costs and drive sales. AI-driven product recommendations are expected to impact $194 billion in online sales in global online sales in November and December.

The forecast is based on data Salesforce collects for its Salesforce Shopping Index, which analyzes data from more than 1.5 billion consumers on retail sites using Salesforce platforms, as well as consumer surveys and other research.

Among the top findings in the report, Salesforce is predicting that:

While digital growth has leveled off this year, that doesn’t mean that all growth has shifted back to the stores, Rob Garf, vice-president and general manager of retail at Salesforce said during a media briefing on the holiday report. “We’re seeing a balancing act happening between online and offline,” Garf said.

“In fact, according to our research, consumers traverse nine different touchpoints in any given shopping journey,” he said, with hybrid shoppers predominating.

As part of that shift to hybrid consumers, store workers are playing an increasingly large role in fulfilling online orders, through curbside pickup, pickup in store, and ship from store fulfillment.

Salesforce estimates that $714 billion in global online holiday sales will be influenced by frontline store workers.

A key theme for retailers this holiday season will be how do they retain the new digital shoppers they gained during the pandemic, Garf said. There was a more than 40% increase in net new digital customers in 2020, according to Salesforce.

Salesforce is predicting slight, essentially flat online growth in the U.S. due to consumer survey findings that they are spending less, and watching their spending, Garf and Caila Schwartz, director, consumer strategy and insights at Salesforce said in the media briefing.

“Consumers are definitely being mindful of their spend,” Garf said. “They are being more value-based. They’re looking for better deals, better bargains, better promotions,” as well as switching to private-label products and shifting to more value-focused retailers, he said.

Among retailers, a top focus now is implementing AI tools. “I have not had a conversation [with retailers] in the last six months that did not include AI,” Garf said. “The key theme that I’m hearing “ he said, “is that at the end of the day it’s about the customer experience and working backwards and understanding what they can do to impact that. Some of it would be focused on efficiency, some of it’s about topline growth, but at the end of the day it’s about the customer experience.”