Salesforce’s 2023 Holiday Forecast* calls for 4 percent global and 1 percent U.S. year-over-year online sales growth across November and December, reaching $1.19 trillion and $273 billion, respectively. 

The customer relationship management (CRM) software company’s forecast offers insights into the timing of holiday discounts, omnichannel practices, artificial intelligence, and return policies.

The flattish growth in the U.S. follows several years of strong online growth. According to the National Retail Federation, core retail sales, excluding auto dealers, gas stations and restaurants, in the U.S. were up 9.5 percent over November and December in 2022 to $261.6 billion, making up 27.9 percent of overall holiday sales. Online sales over the holiday grew 11.3 percent in 2021, 23.9 percent in 2020 and 14.6 percent in 2019.

“Waning consumer confidence and excess inventory have retailers bracing for a challenging holiday season,” wrote Salesforce in a release.

Findings in the Salesforce 2023 Holiday Forecast include:

  • 60 percent of online sales, $714 billion globally, are expected to be influenced by frontline store workers by combining demand creation and fulfilling online orders at retail locations.
  • 17 percent of shoppers report using AI for purchase inspiration. The technology is expected to influence $194 billion in global online holiday shopping spend as retailers use predictive and AI for operational efficiencies and personalized shopping experiences.
  • Cost-conscious consumers are expected to look for discounts. For retailers to compete, Salesforce expects they will begin promotions early to pull forward demand. Salesforce expects a flurry of promotional events in early October, leveraging the halo effect of Amazon’s fall Prime Day this October, followed by aggressive discounts throughout Cyber Week. Salesforce anticipates global discount rates to increase to 19 percent in October and peak at 29 percent during Cyber Week. A quarter of holiday digital sales are expected to occur during Cyber Week. Despite early discounts, consumers will likely hold off on the best and final deals toward the end of the season.
  • 88 percent of retailers said they would make their return policies more strict before the holidays, which presents a risk. Retailers who rein in their return policies could see a slower holiday start. Based on previous years’ data, Salesforce forecasted that retailers with 30 days or less return windows will see 7 percent fewer online sales in October and November. Salesforce also forecasted poor return experiences, those that are not clear, easy and reasonable, would put 21 percent of online orders at risk this holiday.

In the release, Rob Garf, Salesforce’s VP/GM of Retail, said, “After a few years of accelerated e-commerce adoption throughout the pandemic, retailers are under pressure to drive sustainable growth and customer loyalty while maintaining margins. 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.”

*Using Commerce Cloud, Salesforce analyzed aggregated data to produce holiday insights from the activity of more than 1.5 billion global shoppers across more than 64 countries, focused on the U.S., Canada, U.K., Germany, France, Italy, Spain, Japan, the Netherlands, Australia/New Zealand, the Asia-Pacific, excluding Japan, Australia, and New Zealand, and the Nordics.

Photo courtesy NRF