Cyber Week Won the 2023 Holiday Season – Driven by AI and Value Shoppers

Cyber Week is back, baby! While there was a lot of talk of pulling holiday sales earlier in the season, Cyber Week returned to its pre-pandemic prominence in 2023. The holiday shopping season results showed that consumers waited patiently for attractive discounts, and retailers finally delivered on Black Friday and Cyber Monday. 

Global online sales increased 6% year over year (YoY) during Cyber Week, accounting for 23% of all online holiday sales. This marks a shift in when consumers made purchases rather than incremental sales.

In fact, overall online sales were in line with our forecast — growing 3% YoY and reaching $1.17 trillion during November and December. Growth in the U.S. was essentially flat (+1%) and Europe grew 6%. U.S. online sales for the holiday season reached $272 billion. For the first time in five quarters, growth was driven by increased demand and not just higher prices.

And what were shoppers buying? Globally, it looks like there were a lot of general handbags and luggage (+15%) under the tree, along with health and beauty products (+13%) and general footwear (+11%). To make these purchases, shoppers gravitated towards digitally native single brands, which saw 5% growth, and over 3% for other retailers.

So the question is, were our retail holiday predictions spot on? Or did we miss the mark? Let’s take a look:

1. AI’s influence on holiday shopping

We predicted: Generative and predictive AI will influence $194 billion of digital holiday sales.

What happened: A noteworthy 17% of all holiday orders were influenced by AI during the months of November and December, totaling $199 billion. Cyber Week alone saw $51 billion in online sales influenced by AI. 

Who’s doing it: Rossignol lacked the insights and connections it needed to build personal relationships with its customers. To support a new multi-season strategy, it wanted to understand how and when different customers spent their time in the mountains. The company invested in integrating and analyzing data from every touchpoint on every channel — from service conversations to store purchases. 

Today, the marketing team uses captured data, such as browsing histories and product purchases, to personalize weekly emails and text messages, website landing pages, and product recommendations based on a customer’s favorite pursuits, mountain locations, and even weather forecasts, opening up new opportunities for cross-selling and upselling. 

2. The returns experience

We predicted: 21% of holiday online orders were at risk due to poor returns experiences.

What happened: While 88% of retailers revised their returns policies, they focused on making the overall experience easier, clearer, and more reasonable. This transparency, along with enhanced product detail pages – with notably improved product descriptions, often fueled by generative AI – kept returns at bay. Holiday shopping season results show that during Christmas and Boxing Week, retailers experienced a flat year-over-year return rate of 20% across all verticals.

Who’s doing it: Gap Inc. makes returns quick, easy, and personalized. It offers shoppers self-service online and in the app, in-store, or through third-party express returns. The company prioritizes speedy returns to encourage customers to find a new item they will love and has implemented AI decision-making to determine the best solution for the customer. AI and automation also help the team detect frequently returned items and create steps to reduce predicted returns.

3. The BOPIS effect

We predicted: Buy online, pickup in store (BOPIS) will drive $28 billion of incremental in-store purchases.

What happened: Shoppers welcomed flexible store fulfillment options. As the shipping cutoff window began to close, one in three orders were BOPIS during Christmas and Boxing Week – a significant 26% increase over last year. This drove foot traffic to the store and increased opportunities to sell additional merchandise.

Who’s doing it: To meet rising demand and stay competitive, Pet Supermarket invested in optimizing its last-mile delivery process. The specialty pet supply retailer streamlined the automation of delivery operations, expanded in-store fulfillment capabilities, designed a new BOPIS experience, and enhanced visibility into shipment tracking with branded customer communications.

Stores became micro fulfillment centers as Pet Supermarket expanded its digital product catalog, giving customers more choice and value. Today, most online orders are fulfilled from stores, and as a result of enhancements to its BOPIS experience, Pet Supermarket has seen an increase in attachment during pickup.

4. Social media ads

We predicted: Social media will drive 10x more online traffic versus traditional marketing.

What happened: Social media continues to play an important role when it comes to discovery and inspiration. While it didn’t hit the 10x mark, social media still drove 5x more online traffic this holiday compared to email and digital advertising combined. Traffic coming from social media grew by 7% during the holiday season – accounting for 10% of all mobile traffic referrals globally. As social becomes increasingly important, many retailers are doubling down on their data strategy to understand the customer throughout the entire funnel.

Who’s doing it: Just as its business model quickly responds to customer demand, H&M shows up across various digital channels in a highly personalized way. The H&M team creates curated content tailored to each platform’s audience, including user-generated posts, influencer takeovers, interactive contests, and virtual fitting rooms. Data-driven personalization, powered by AI, is essential to H&M’s social success.

5. Resale merchandise

We predicted: 17% of holiday gifts will be resale merchandise, saving 32 billion pounds of waste.

What happened: In 2023, 85% of shoppers in the United States bought or sold previously owned items. While we don’t have a breakdown specifically for holiday shopping season results, we think it’s safe to say this spilled over into seasonal gift-giving as well.

Who’s doing it: The nonprofit GoodwillFinds has spent over a century cultivating its unique retail experience, where in-store shoppers stumble upon affordable and memorable resale items while doing good for their community. By developing a new online footprint, GoodwillFinds tapped into the massive growing audience of shoppers looking for deals online. And, with inflation high, its affordable product catalog was attractive to online shoppers during the holidays.

Takeaways from holiday shopping season results 

So, holiday shopping season is a wrap! As retailers close out their fiscal year and begin planning for 2024, what can they expect based on the holiday numbers we crunched?

Retailers, in general, should feel good about holiday results. The goal for many all along was to remain above water and exit the critical holiday season with strong margin and inventory levels. Now it’s time to focus on profitably growing relationships and revenue. This means hyper-focus on using customer data to drive personalized and seamless experiences across the growing number of online and offline touch points.

2023 Salesforce holiday insights and predictions methodology

Powered by Commerce Cloud, Marketing Cloud, and Service 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, with a focus on 12 key markets: the U.S., Canada, U.K., Germany, France, Italy, Spain, Japan, the Netherlands, Australia/New Zealand, the Asia-Pacific region (excluding Japan, Australia, and New Zealand), and the Nordics. 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.

The prediction data that we present are from proprietary Salesforce research. The calculations we use blend first-party and third-party data, as well as several market assumptions, to generate the data points presented.

The Salesforce holiday predictions are not indicative of the operational performance of Salesforce or its reported financial metrics including GMV growth and comparable customer GMV growth.