As we enter peak holiday shopping season, consumers are in no rush to check off items on their shopping lists. Our Shopping Index data shows that retailers across the globe held steady on discounts in the third quarter, and shoppers responded by playing coy – much like they did in the previous quarter – patiently waiting for price drops.

Overall, online traffic remained strong – growing  3% globally and 2% in the U.S. – with consumers continuing to research products online and, in many cases, going into the physical store to purchase. That’s a good sign for retailers this holiday shopping season, as online research likely indicates shoppers’ intent to buy, just not at current prices. It also could mean shoppers are waiting to purchase from their favorite retailer or brand, after several years of switching due to availability and value.

The quarter’s online sales were essentially flat (+1%) globally, year over year, even in the U.S., which normally bumps up global growth. Even so, shoppers in Europe continued the buying trend of the previous quarter, with sales up 9%, purchasing more per transaction (+2% units per transaction) although shopping less frequently (-3% order volume). That said, much of the online sales growth in the region was driven by higher prices, with the average selling price up 11%.

So what are shoppers eyeing and buying right now? Fashion accessories are in, as general handbags and luxury handbags were up 20% and 15%, respectively. Active footwear remains popular as sales jump 19%. On the other hand, the toys & learning and electronics categories are down (-21% and -13% respectively), showing the steepest decline in online sales. Consumers may be waiting to see the traditionally deep discounts for those product categories over Cyber Week.

What might third-quarter shopping data tell us about the holiday shopping season? Here’s what we predict for the rest of the year:

Consumers play discount chicken

With consumers traveling, playing, and relaxing outdoors over the summer, retailers held back on discounts: The average discount rate in the third quarter globally was 38% lower than what we predict for Cyber Week (the Tuesday before Thanksgiving through the Monday after). As mentioned, consumers seem willing to wait, tightening their purse strings in September as global online sales fell 3%, following a healthy bump in spending in July and August. We believe this is the calm before the storm as consumers hope for a deluge of expected discounts in the next few months. 

What does this mean for the holiday shopping season?
Shoppers will seek deals and value. In response, retailers will bookend the holiday promotional calendar with attractive discounts. We expect a flurry of promotional events in early October, benefiting from the halo effect around Amazon’s fall Prime Days. Then, after a bit of a lull, we anticipate aggressive discounts throughout Cyber Week. We think consumers are prepared to play a long waiting game, holding out for the best and final deals toward the end of the season. This will likely result in 25% of all holiday digital sales taking place during Cyber Week.

AI continues to drive incremental sales

We expect AI to influence $194 billion in global online sales this holiday season. Generative AI is the season’s new, shiny object, and consumers want to be part of the action. Earlier this year our research showed 17% of consumers have used GPT for product research and inspiration, and 10% will likely use it to help build their holiday shopping lists. We’re already seeing AI’s impact on the season, as the number of orders where shoppers clicked on a predictive-AI-powered product recommendation increased 6% year over year globally in the third quarter.

And remember all those handbag purchases? Predictive AI influenced 29% of those orders in the general handbags and luggage category. Active apparel came in second, with 22% of orders influenced by AI. 

What does this mean for the holiday shopping season?
Brands and retailers will continue to embrace both predictive and generative AI over the holiday season. Some retailers will roll out early generative AI capabilities like product descriptions for websites, marketing copy for personalized emails, and even service replies to assist agents. Your best bet is to use customer data alongside AI to create better, more personalized shopping experiences that add value and increase loyalty. 

Loyal shoppers drive profitable growth

For the last few years, we’ve seen an uptick in people switching brands due to availability, quality, and value. Keeping your customers loyal has been challenging and you’ve probably invested in elevating rewards programs and customer experiences to keep shoppers coming back. Well, good news! You’re now seeing a return on that investment. In the past quarter, in particular, the share of orders from repeat buyers was a whopping 43%. This marks a 30% increase in repeat buyers compared to 2021 – showcasing the need for retailers to create stickiness and increase share of wallet with loyal customers.

What does this mean for the holiday shopping season?

To keep that momentum going, focus on strategies and programs that surprise and delight customers, offering better deals and added value. In particular, take a look at opportunities in service, since 94% of customers say good service makes them more likely to buy again. Connect service agents to customer data to help them understand the customer’s journey up to the point of contact, and meet customers on the channels and devices they prefer. This is particularly important for younger generations who are choosing digital channels like live chat and social media. 

Ready for the holiday shopping season?

Your team has been waiting all year for this peak shopping moment, and the third quarter results look like it will be a happy holiday season for all. To be successful, put your customers first, welcoming the new ones and reminding the loyal ones why they keep coming back. You’ll do this with your trusty customer data, tech tools like AI, personalized offers, and a thoughtful promotional calendar that delivers the deals consumers are seeking. 

Methodology

Powered by Salesforce platform data, the Shopping Index uncovers the true shopping story. We look at the previous nine quarters to uncover a deep understanding of how consumer behavior is evolving and how the market is moving. The Shopping Index analyzes the activity and online shopping statistics of more than 1.5 billion unique global shoppers from more than 67 countries. This battery of benchmarks covers both the recent history and current state of digital commerce. Several factors are applied to extrapolate macroeconomic figures for the broader retail industry, and these results are not indicative of Salesforce performance.