Loyal shoppers will matter more this holiday season

By April Berthene

June 24, 2024
loyal shoppers 2024 holiday season

With increasing digital marketing costs, retailers will need to tap their loyal shoppers for 2024 holiday sales, predicts Salesforce.

Retailers will tap loyal shoppers to avoid increasing digital marketing costs this 2024 holiday season, ecommerce platform and technology provider Salesforce predicts. This is one of Salesforce’s five 2024 holiday season shopping predictions, which are:

  • Chinese shopping apps will take market share
  • Middle-mile shipping puts strain on margins
  • Shoppers embrace AI to search for the perfect gift
  • Black Friday becomes Cyber Friday
  • Retailers tap loyal shoppers to avoid skyrocketing digital marketing costs

Salesforce predicts 40% of a retailer’s online holiday sales will be made from a repeat buyer, which is an increase from 39% of November and December online sales in 2023, and up from 37% in 2022, according to Salesforce data.

Already in 2024, shoppers are motivated to buy because of a retailer’s loyalty program, according to Salesforce. 46% of shoppers say earning and redeeming loyalty points is the second highest factor, behind price, influencing where they buy, according to a May 2024 Salesforce survey of 996 shoppers. And 63% of shoppers are making more purchases from stores where they can earn and redeem loyalty points.

Prior to the holiday season, Salesforce recommends retailers communicate early and often with their audience to keep them engaged throughout the season, said Caila Schwartz, director of consumer strategy and insights at Salesforce.

The vendor recommends brands incentivize their loyalty program members by offering them exclusive perks, such as free expedited shipping and gift wrapping, early access to sales, and exclusive merchandise.

“Convenience will be a key factor in where shoppers choose to shop this year, so making it easy to buy across all channels is crucial,” Schwartz said. “Aside from offering loyalty points, giving your loyalty members early access to sales and product drops are great tactics to keep shoppers engaged.”

Holiday shoppers will wait for discounts, trade down

Two of Salesforces predictions — Chinese shopping apps will take market share and Black Friday becomes Cyber Friday — denote the current strained economic conditions of U.S. shoppers. 40% of shoppers say they are purchasing fewer goods in 2024 compared with 2023 and 85% of shoppers say they are making tradeoffs because of price, such as trading down, buying discounted merchandise and seeking private labels, according to Salesforce’s consumer survey.

These factors will result in more U.S. shoppers buying on Chinese shopping platforms including marketplaces AliExpress and Temu, apparel merchants Cider and Shein, and social media platform TikTok. The majority of shoppers say they buy from these apps because because they offer the lowest price. 63% of Western consumers plan to purchase from these applications during the holiday season, according to the survey.

Shoppers also will wait to buy gifts until Black Friday for the best discounts of the season. For the first time in 2023, Black Friday was the largest online shopping day, overtaking Cyber Monday, according to sales data from Salesforce retail clients. The vendor again predicts that Black Friday will be the largest online shopping day of the 2024 holiday season and the entire year.

“Two-thirds of shoppers say they’re holding out on making big purchases until Cyber Week, anticipating better deals. And 65% of shoppers say Black Friday has the best discounts of the year,” Schwartz said.

To thwart competitors from taking market share, Salesforce again recommends that retailers tap loyal shoppers and develop an attractive promotion and discount strategy for November.

“Even if your special pricing doesn’t go into effect until Black Friday, give shoppers advance notice, especially those enrolled in your loyalty program, so they’ll wait for your discounts,” Schwartz said.

Schwartz recommends retailers to be clear and consistent with their promotional strategy to earn shoppers’ trust.

“This season will be competitive, intense, and no doubt all about pricing and discounting strategies,” Schwartz said.

AI for search, shrinking margins

Not only are marketers embracing artificial intelligence, so are shoppers. For retailers that offer artificial intelligence in their site-search functionality, Salesforce predicts those shoppers will have a three-times higher conversion rate during the 2024 holiday season compared with shoppers who don’t engage with a retailers AI-enhanced site search.

Salesforce also predicts that retailers’ profit margins will shrink during the 2024 holiday season because of rising shipping costs. The vendor estimates retailers will spend an extra $197 billion in middle-mile expenses, increasing 97% over last year, thanks to container costs increasingly globally.