Holiday Sales 2024: 6 Interesting Findings in E-commerce
The holiday season is about to come to an end. Are you scouring the web to see how the sales fared this year? So far, experts' opinions are split. While most of them consider spending discretionarily, sales are set to grow at the slowest rate. Winning retailers undoubtedly distinguish themselves, leaving competitors in the dust.
If you're curious about what's going on in the e-commerce landscape, why not take a deep dive into the busiest shopping spree of the year with us? Here are some interesting findings from this holiday season.
An AI Revolution Across the Industry
In the wake of OpenAI's launch of the full o1 model for handling more complicated tasks, early on November 18, Perplexity rolled out its AI-powered shopping assistant, "Shop like a Pro," for paying customers in the United States, poised to reshape online shopping. Meanwhile, Target's AI gift finder aims to create enjoyable shopping experiences.
AI technologies are not merely hype. Most retailers are geared up for the AI implementation race.
According to NVIDIA, leading retailers proactively implement AI. The adoption rate among retailers earning over $500 million in revenue reaches 65%, 55% above the retail industry average. More than 80% of survey respondents have already deployed 3 or more use cases, while nearly 50% have 6 or more use cases.
The outcomes? 69% attribute an increase in the annual revenue to AI, while 72% believe AI has contributed to reduced operating costs.
Another study published on SellersCommerce reveals that although there is a widespread concern that AI may take over jobs, 36% of C-suite executives believe in the power of AI for handling routine tasks and improving overall productivity, allowing employees to focus on more creative tasks.
Read More: The AI Advantage: 10+ Insights on AI's eCommerce Revolution
Shoppers Favor Cheaper Alternatives and Second-Hand Items
A CNN report published in March 2023 reveals the fact that across 11 categories of e-commerce, inflation-stricken Americans flock to buy cheap alternatives.
No wonder that since Temu's debut at the Super Bowl with the "Shop Like a Billionaire" ad, the online marketplace has expanded rapidly worldwide, with its app dominating the App Store in many countries. Temu keeps showering deep discounts and showcasing cheap goods that seem "too good to refuse," bargain seekers come in droves.
Apart from Temu, Shein and TikTok Shop are also gaining traction around the world by providing endless assortments of cheap goods because value for money is top-of-mind for nearly 57% of consumers. Salesforce predicted that 20% of online purchases will be made from these shopping apps.
In an attempt to fight against Temu, Shein, and TikTok Shop, Amazon launched Amazon Haul to showcase products $20 or less and cater to younger and more price-conscious consumers.
Additionally, many studies show that second-hand e-commerce is on the rise. According to Statista, up to 1 in 3 U.S. consumers shopped for second-hand items in 2023 to save more money. Furthermore, 68% of shoppers plan to buy pre-owned items, and a staggering 83% say it's fine for them to receive second-hand gifts this holiday season.
The Popularity of Mobile Shopping is on the Rise
The United Kingdom, United States, and Germany are the top 3 countries in terms of smartphone penetration. More specifically, 9 in 10 U.S. adults aged between 18 and 49 use a smartphone to make online purchases (Pew Research 2022).
More and more people use their smartphones to buy online. Forbes reported that the 2024 holiday season started with a big bang, with 53.1% of sales coming from mobile devices, up by 14.1% (YoY).
Despite the upward trend, please note that many online retailers have developed their own mobile apps, but consumers won't download and use an app just because of its availability—people need to be convinced of the benefits of using your app.
To adopt a mobile-first approach, you may get inspiration from these top 7 retailers: Overstock, IKEA, Starbucks, Walgreens, Home Depot, Sephora, and Oasis.
Apart from the above, you should also consider integrating the mobile payment platforms that your customers are using to reduce cart abandonment rates.
The Tremendous Impact of Gen Z Consumers on Ecommerce
In case you don't know what exactly Gen Z is—here's a definition. Pew Research Center defines Gen Z as people born from 1997 and onward. In recent years, the economic and social influence of Gen Zers has become increasingly pronounced.
According to NielsenIQ, Gen Z is reshaping e-commerce with its unique consumer behaviors and ever-increasing spending power—it's estimated that Gen Z's spending will reach about $12 trillion.
Speaking of the holiday season alone, Gen Z's spending increased by 37% last year. USA TODAY reported that Gen Z planned to spend nearly 21% more than last year. Another study implies that Gen Z would take the lead in terms of total spending this holiday season, as they're 2 times more likely to buy gifts than the average shopper and even over 10 times more likely than Baby Boomers.
Therefore, it's important to cater to Gen Zers. First of all, you need to develop a good understanding of their expectations from online retailers. Here are 8 essential aspects:
Super fast shipping
Free shipping
High-level personalization
Seamless omnichannel experience
Sustainability
AR try-on technology
Voice-enabled shopping
Authenticity & transparency
Holiday Season Financed by BNPL Services
According to Adobe Analytics, BNPL services are particularly popular during the holiday season. A further study reveals that 67% of parents plan to relieve financial constraints and facilitate budget control with BNPL this holiday.
Research indicates that those who confronted a financial disruption before are more likely to use BNPL services. Moreover, they are popular among younger generations, for example, in the United States, the BNPL adoption rate among Millennials is 55% and Gen Z 51%.
It's likely that 2025 will witness further adoption of BNPL services as they are expanding operations worldwide. Although new customer protection regulations may come out and take effect to prevent young people from overspending, as an online retailer, you adopt BNPL payments as soon as possible to turn more window shoppers into purchases.
Stockpiling Inventory in Fear of Tariff Increases
In anticipation of President-elect Donald Trump's proposed tariffs—potentially up to 60% on Chinese goods and 25% on imports from Mexico and Canada. For this reason, according to The Wall Street Journal, nearly 25% of U.S. people surveyed consider this holiday season to be a good time for major purchases.
Meanwhile, across industries, many U.S. retailers are proactively stockpiling inventory to mitigate future cost increases, aiming to circumvent the immediate financial impact of tariffs expected to commence in early 2025.
This preemptive stockpiling has led to a surge in import volumes, with U.S. ports experiencing record container traffic. For instance, the National Retail Federation reported that major container ports handled 2.25 million twenty-foot equivalent units (TEUs) in October, marking a 9.3% increase year-over-year (THE SCXCHANGE).
Learn More: How Trump's Economic Plans Are Set to Transform eCommerce
Summing up
From studying the 2024 holiday season, we've drawn many valuable insights into the evolving e-commerce landscape. From AI-driven innovations to the growing influence of Gen Z and the popularity of BNPL services, the industry continues to transform rapidly.
Certainly, retailers who adapt to these trends and meet the changing demands of consumers will position themselves for long-term success in the competitive world of e-commerce.
What trends stood out to you this holiday season? Please share your thoughts with us below!
Related Articles:
BFCM 2024 Reviewed: A Successful Year With More to Expect
Your BFCM Checklist: 8 Key Tips to Maximize Your BFCM Sales
7 Tips to Enhance Customer Loyalty Through Post-Purchase Experience