Salesforce 2023 Holiday Forecast: AI Gives Retailers Hope as Shoppers Watch Their Wallets

Continuing a sluggish first half of the year for retail, 2023 online holiday sales are expected to reach $1.19 trillion globally — remaining essentially flat year over year.

How retail can respond: Data from more than 1.5 billion consumers indicates that retailers should look to drive revenue and preserve margins with well-planned discounts and updated return policies. 

• The savviest retailers will also tap predictive and generative AI to win this holiday season. 
• According to the report, personalized customer service, marketing promotions, and commerce experiences powered by AI will drive $194 billion in global online holiday spend.

Why it’s relevant: The Salesforce Shopping Index analyzes global data from more than 1.5 billion consumers on retail sites using Salesforce’s Customer 360 (including 24 of the top 30 U.S. online retailers) to forecast holiday spending.

Insights on the 2023 holiday shopping season (Nov. 1-Dec. 31):

• Digital sales growth levels off: Waning consumer confidence and excess inventory have retailers bracing for a challenging holiday season. Salesforce forecasts 4% global and 1% U.S. year-over-year online sales growth across November and December – reaching $1.19 trillion and $273 billion respectively. Sixty percent of these sales – or $714 billion globally – will be influenced by frontline workers in the store by a combination of creating demand and fulfilling online orders at retail locations. 

• AI catches consumers’ eyes — and wallets: 17% of shoppers report they’ve already used generative AI for purchase inspiration. The technology will influence $194 billion in global online holiday shopping spend as retailers use predictive and generative AI for operational efficiencies and personalized shopping experiences.
• Discounts come early this year: Price-conscious shoppers will seek attractive discounts and to compete, retailers will kick off their 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 – followed by aggressive discounts throughout Cyber Week.
  • Salesforce anticipates global discount rates to rise to 19% in October and peak at 29% during Cyber Week. Despite the attractive early discounts, consumers will likely hold off for the best and final deals toward the end of the season.
  • Additionally, 25% of all holiday digital sales will take place during the Cyber Week seven-day period.

• Retailers take a closer look at returns: 88% of retailers say they will make their return policies stricter ahead of the holidays, which presents a risk. 
  • Retailers who rein in their return policies could see a slower start to the holidays. Based on previous years’ data, Salesforce predicts that retailers with return windows of 30 days or less will see 7% fewer online sales in October and November. 
  • Poor return experiences – those that aren’t clear, easy, and reasonable – will put 21% of online orders at risk this holiday.

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.

Rob Garf, VP & GM, Retail

The Salesforce perspective: “After a few years of accelerated ecommerce 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.” – Rob Garf, VP & GM, Retail

Go deeper: 

• Find out how retailers will drive success and innovation this holiday season here
• Visit the Holiday Insights Hub for more shopping predictions and analysis
• View Salesforce’s 2022 holiday season findings here
• Learn about Salesforce’s generative AI offerings for commerce here

2023 Salesforce holiday insights and predictions methodology

Powered by 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, 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 (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, and these results are not indicative of Salesforce performance.

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 we present.