Salesforce’s report reveals artificial intelligence is set to contribute over $200 billion to holiday sales, highlighting its pivotal role in transforming retail experiences.
As the holiday shopping season unfolds, a report by Salesforce highlights the significant role of artificial intelligence (AI) in shaping retail strategies and consumer experiences. According to the analysis, AI is projected to contribute over $200 billion to holiday sales, marking a 12% increase compared to the previous year. This surge comes as retailers adopt AI across various aspects of the shopping experience, enabling more tailored and interactive engagements with consumers.
The report indicates that since Cyber Monday, there has been a notable 23% weekly increase in the use of generative AI and agents by retailers, underscoring a rapid adoption of these technologies. From November 1 to December 15, global online sales accumulated to $849 billion, reflecting a 4% increase year-over-year. This uptick in sales can be attributed, in part, to the influence of AI, which has impacted 19% of international orders through tailored promotions, product recommendations, and order support.
Caila Schwartz, Director of Consumer Insights and Strategy for Salesforce, stated, “As retailers work to cash in on the final spending frenzy, AI agents are a lifeline. By handling questions, order issues, and recommendations with a personalized touch, they are making last-minute gifting feel effortless. These retailers will win a bigger slice of the holiday pie.” This sentiment underscores the strategic importance of AI in the current retail landscape, especially during peak shopping periods.
Despite the increasing integration of AI into retail practices, some research indicates that consumer trust remains a barrier to wider adoption. A report from Perfect Corp. outlines that while 52% of shoppers are currently using AI tools or plan to do so in the future, nearly half (48%) expressed a reluctance to engage with generative AI. Key reasons for opting for AI include seeking assistance from virtual assistants (26%), experimenting with virtual try-on technology (23%), and accessing personalized product searches (23%). However, a separate survey from Bain revealed that many consumers are content with their existing shopping habits, contributing to the hesitance towards AI.
In response to evolving consumer preferences and behaviour, retailers are launching generative AI tools aimed at enhancing the shopping experience. For instance, Target has unveiled its Bullseye Gift Finder, a feature that utilises generative AI to suggest items based on individual preferences. Additionally, the retailer has introduced a generative AI-powered Shopping Assistant, designed to provide product recommendations and address customer inquiries. Similarly, Nordstrom has updated its mobile app, integrating generative AI to streamline the holiday shopping experience.
As AI continues to reshape the retail landscape, its implications on consumer engagement and business strategies are becoming increasingly pronounced. The integration of these technologies promises to redefine how shopping experiences are crafted, catering to a new generation of consumers who are beginning to embrace the capabilities offered by artificial intelligence.
Source: Noah Wire Services
- https://www.salesforce.com/news/stories/christmas-holiday-sales-predictions-2024/?bc=OTH – Corroborates the projection that AI will contribute over $200 billion to holiday sales, the 23% weekly increase in the use of generative AI and agents since Cyber Monday, and the impact of AI on 19% of international orders.
- https://www.salesforce.com/news/stories/christmas-holiday-sales-predictions-2024/?bc=OTH – Supports the statement by Caila Schwartz on the role of AI agents in enhancing consumer experiences and driving sales.
- https://www.retaildive.com/news/ai-to-influence-over-200b-in-holiday-sales/735745/ – Confirms the projection that AI will drive more than $200 billion in holiday sales, a 12% increase from last year, and the 23% weekly increase in AI and agent usage since Cyber Monday.
- https://www.retaildive.com/news/ai-to-influence-over-200b-in-holiday-sales/735745/ – Details the influence of AI on 19% of orders internationally through custom promotions, product recommendations, or order support.
- https://www.salesforce.com/news/stories/christmas-holiday-sales-predictions-2024/?bc=OTH – Provides data on global online sales from November 1 to December 15, which reached $849 billion, a 4% year-over-year increase.
- https://www.retaildive.com/news/ai-to-influence-over-200b-in-holiday-sales/735745/ – Outlines consumer reasons for using AI, including assistance from virtual assistants, virtual try-on technology, and personalized product searches.
- https://techstrong.ai/ai-at-the-edge/genai-will-hike-holiday-e-commerce-sales-to-record-240-billion/ – Discusses the broader adoption of generative AI in e-commerce, including its role in enhancing consumer experiences and driving sales.
- https://techstrong.ai/ai-at-the-edge/genai-will-hike-holiday-e-commerce-sales-to-record-240-billion/ – Mentions the integration of AI by major retailers like Amazon, Google, and Microsoft to enhance customer experiences and streamline shopping processes.
- https://www.salesforce.com/news/stories/christmas-holiday-sales-predictions-2024/?bc=OTH – Highlights the strategic importance of AI in retail, especially during peak shopping periods, and its impact on consumer engagement and business strategies.
- https://www.retaildive.com/news/ai-to-influence-over-200b-in-holiday-sales/735745/ – Addresses consumer trust issues as a barrier to wider AI adoption and details the reasons consumers opt for AI tools.
- https://techstrong.ai/ai-at-the-edge/genai-will-hike-holiday-e-commerce-sales-to-record-240-billion/ – Explains how retailers like Target and Nordstrom are using generative AI to enhance the shopping experience through features like gift finders and shopping assistants.
