Retail news that keeps industry pros in the know
Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.
After a year of retailers touting price cuts and affordability, the 2024 holiday season saw only a modest increase in discounting, according to a new report from Salesforce. The average discount rate for the season hit 23% in the US, which was up just 1% from the year before.
- Yet some categories were more promotional, with a 33% average discount for general apparel, 29% for health and beauty, and 18% for home goods and decor.
Salesforce also found that an increasing number of shoppers are turning to loyalty programs, which is good news for retailers looking to attract and retain customers without marking down their merchandise. In a survey, the company found that 72% of US shoppers said loyalty programs made them more likely to stick with a brand.
Overall, Salesforce analyzed 1.5 billion shoppers and 1.6 billion page views across its platform to find that online sales hit $1.2 trillion globally and $282 billion in the US this year, up 3% and 4% YoY, respectively.
But a significant uptick in the number of returns is dampening some of these gains: More than $122 billion worth of global purchases have already been returned, which is up 28% from last year. And Salesforce expects this number to tick up to $133 billion, which it said is putting pressure on brands to make their return process smoother and more tailored to customer needs.
“Retailers had a robust holiday season, but a 28% rise in the rate of returns compared to last year is a cause for some concern,” Caila Schwartz, director of consumer insights at Salesforce, said in a statement.
The answer to this risk could be more innovation. The report from Salesforce noted that $229 billion in global sales were in some way influenced by AI through targeted offers, product recommendations, and conversational customer service support. This comes on the back of a 25% increase in the use of generative AI features by retailers, and a 42% increase in the use of AI-powered customer service by shoppers.
“Retailers who have embraced AI and agents are already seeing the benefits, but these tools will be even more critical in the new year as retailers aim to minimize revenue losses on returns and reengage with shoppers,” Schwartz said.