A study by Salesforce, a world leader in CRM, and also one of the leading companies in the development of artificial intelligence (AI), predicts in a fresh study about the behavior of consumers for the holiday shopping season that is looming. The company expects digital sales to hit record highs and increase pressure on shipping capacity as retailers grapple with the impact of the COVID-19 pandemic.
The pandemic has forced many companies to operate daily at Back Friday efficiency levels as customers move towards digital commerce. As this trend continues, Salesforce forecasts a 30% growth in global online commerce this holiday season (up from an 8% increase in 2019); digital sales to reach a record $ 940 billion worldwide; a more than probable acceleration of online commerce of up to 18% of total retail sales worldwide; and a forecast of $ 5.1 trillion in total holiday sales.
Four predictions
As the pandemic affects the way retailers sell and send gifts, the popularity of different product categories, and delivery times, Salesforce notes that as health mandates forced stores and warehouses to close, many businesses were shutting down. they faced problems meeting those standards and struggled to maintain both product availability and delivery times that customers were used to. As a result, buyers’ priorities now are availability, shipping, and delivery times. Due to all this, two convergent pressures from carriers will arise due to the increase in online orders. For one thing, the total volume of packages that must reach a customer’s hands will likely exceed shipping capacity by 5% globally, potentially delaying up to 700 million packages this Christmas. And on the other, it is expected that between November 15 and January 15, approximately $ 40 billion in “COVID-19 surcharges per delivery” will be generated worldwide, as delivery companies prepare for a change. mass towards digital commerce.
To avoid a deadline crisis, retailers are offering alternatives like in-store pickup after buying online, which can help increase their digital revenue by 90% on average over last year. Retailers are also turning to “Last Mile” delivery strategies in droves to ease the pressure on delivery companies. Reminding shoppers to buy early and highlighting shipping deadlines will help consumers avoid last minute purchases and reduce fulfillment stresses during busy weeks.
Christmas shopping will start earlier
The combination of Amazon’s “Prime Day”, October 13-14, and consumers eager to make sure their packages arrive on time, will lead to an earlier start to the holiday shopping season. This anticipated demand is expected to displace up to $ 26 billion of Cyberweek volume from November to October worldwide. However, Cyberweek digital traffic will continue to grow this year, specifically by 28%, a trend accelerated by the almost ubiquitous access from mobile phones and the fact that fewer people will go to stores on Black Friday.
The predictions also point to health and safety concerns, anticipated product shortages and shipping delays contributing to an earlier Christmas shopping season.
Increase in returns
More digital purchases will mean an increase in returned merchandise. In total, $ 280 billion in online purchases are expected to be returned globally, 30% of all purchases made. To reduce return rates, retailers should turn to smart assistants to guide online shoppers to the right products through communication tools like live chat. Merchant websites should also be revamped to offer full product descriptions, reviews, videos, clear and accurate guides, inventory availability, and expanded shipping options to minimize returns.
Consumers are expected to engage 30% more with customer service agents during the Holiday Season. Merchants are equipping them with the tools and skills to quickly respond to consumer requests, particularly in regards to product availability, shipment visibility and status.
Most popular product categories
The rapid change in consumer behavior brought on by the pandemic will drive a shift in the product categories preferred by users. The main sections last year included footwear, general and luxury clothing, beauty and electronics and games. While beauty, electronics and games will once again be the top spending categories in Christmas 2020, furniture and home decor, fitness products and toys are among this year’s leading new categories.
To help retailers and brands evaluate the performance of the Christmas campaign, Salesforce analyzes aggregated data to obtain insights from the activity of more than 1 billion buyers around the world in more than 40 countries, including Spain, thanks to Commerce Cloud and publicly available third-party data sources. And in order to be included in the analysis set, an online sales website must have carried out transactions during the entire analysis period, in this case from April 1, 2018 to June 30, 2020, and meet a minimum threshold of visits monthly. Additional data hygiene factors are applied to ensure a consistent metric calculation.
