What shoppers want in 2024: Holiday data shows changing consumer mindset

Now that we’ve slowed down to take stock of exactly what happened during the busiest season for retail, the results might make your head spin. Looking back at the holiday data can better prepare retailers for increased profitability in 2024.

According to the National Retail Federation, consumers spent between US $957.3 billion + $966.6 billion during the 2023 holiday shopping season, 3% to 4% more than 2022. 200.4 million consumers shopped between Thanksgiving and Cyber Monday, breaking last year’s record of 196.7 million.

How and when these consumers spend their money, as well as what they’re spending it on, is changing rapidly.

Yet, amid all this change, one thing is certain – it’s still the most wonderful time of the year for businesses using SAP Customer Experience (SAP CX) solutions to power their sales during the holiday shopping season.

An analysis of data from SAP CX solutions, including SAP Commerce Cloud and SAP Emarsys Customer Engagement, uncovers big wins for retailers using the solutions during Black Friday and Cyber Week:

• $110 million in peak gross merchandizing per minute
• 35% year-over-year (YoY) increase in the number of orders processed
• 3% YoY increase in overall site traffic
• 2% higher conversion rate
• Billions of customer engagements across e-mail, SMS, mobile push, and more

And that’s just the start. This year’s retail results reveal how businesses worldwide are using SAP CX solutions to keep up with fast-changing retail trends and consumer demands.

Here are our three big takeaways from the 2023 holiday shopping season:

1. Black Friday creep continues to change how shoppers spend – and businesses need to be prepared to handle increased e-commerce traffic for longer periods.
2. There’s more to Black Friday than Thanksgiving – because international holidays such as El Buen Fin and Singles Day are increasingly influencing sales.
3. Personalization and omnichannel CX cut through the chaos – especially when consumers are receiving more engagements from brands than ever.

Plus, a prediction into a new way consumers will shop in 2024 that could change everything.

Holiday data meets the changing future of commerce

1. Black Friday creep continues to change how shoppers spend

Does it seem like holiday shopping starts earlier and earlier every year? It’s not just you. Ask almost any expert, and they’ll confirm that we’re seeing a trend toward monthslong sales events beginning as early as October.

In a survey by NRF, 43% of holiday shoppers said they planned to start making purchases before November.

Thanks to inflation, it’s likely that shoppers are trying to spread out their spending as much as possible. They’re also more likely to hold out for a lower price if they think bigger sales are coming, frequently revisiting products online before making the purchase.

In fact, the longest path to purchase during the holidays is about 45 days, according to Criteo, an SAP commerce media partner.

This means higher strain on your e-commerce sites and mobile shopping apps that lasts much longer than you might anticipate. Combating this, businesses using SAP Commerce Cloud and SAP Emarsys Customer Engagement experienced 100% uptime with no unexpected downtime leading up to and during Cyber Week.

2. There’s more to Black Friday than Thanksgiving

Americans aren’t the only ones who love inventing a reason to shop.

Singles Day is an alternative to Valentine’s Day that gives – you guessed it – single and unmarried Chinese shoppers a reason to do a little retail therapy. The 24-hour shopping event on November 11 continues to boost customer engagements each year, especially online.

In 2023, SAP Emarsys Customer Engagement saw a spike on Singles Day, nearly surpassing one billion customer engagements – including e-mail, SMS, mobile + web push – two weeks ahead of Black Friday.

This figure was doubled during El Buen Fin, which saw overall an approximate 30% YoY increase in messages delivered. El Buen Fin began a little over a decade ago as a joint effort by the Mexican government and retail sector to boost the country’s economy. Its growing influence gives businesses an opportunity to connect with consumers in this market and turn them into lifelong customers.

Businesses that ran holiday sales events using SAP Commerce Cloud during El Buen Fin achieved 112% growth in conversion rate, with 10% higher traffic volume compared to the regular daily average of 2023.

Cyber Week’s influence doesn’t stop there, and deals based around American holidays continue to command spending in worldwide markets. Consumers in the Europe, Middle East, and Africa (EMEA) region placed approximately 800,000 orders on Black Friday using SAP Commerce Cloud. Meanwhile, the Asia Pacific and Japan (APJ) region on Cyber Monday achieved more than 130% growth in conversion rate compared to last year.

3. Personalization and omnichannel CX cut through the chaos

E-mail, SMS, social media, push mobile. The number of ways brands are engaging with consumers continues to grow as the landscape of technology evolves. However, the 2023 holiday shopping season might finally be what proves that less is more.

Businesses enabled more targeted offers and personalized messages by using SAP Emarsys Customer Engagement to increase their data-driven segmentation by 20% compared to the previous year.

Further focusing on quality over quantity, brands are investing heavily in omnichannel engagement strategies. Omnichannel CX helps ensure that customers receive the same high-quality experience at every touch point, no matter where they begin and end their shopping experience with a brand.

When it came to volume, though, businesses sent a record number of omnichannel messages through SAP Emarsys Customer Engagement, resulting in a 9% YoY increase in customer engagements from 2022. E-mail remained the top promotional channel in terms of volume and saw a 10% YoY increase; however, mobile messages such as SMS (35% YoY increase) and in-app (15% YoY increase) were used effectively alongside e-mail, as were web channel engagements, including web push, which saw a whopping 74% increase in use in 2023.

What’s next for 2024?

For many shoppers, the limitless choice presented by e-commerce is becoming overwhelming. There are simply too many options – tens of thousands of brands with seemingly infinite sales promotions – for some shoppers to feel confident making a decision themselves.

While 2023 Cyber Week results were stellar, increasingly constrained consumer budgets and shopper burnout may hurt sales in 2024. AI can help.

Shoppers are increasingly trusting AI to help make their spending decisions.

E-commerce and online customer behavior are about to change dramatically as AI takes center stage. SAP Commerce Cloud empowers brands to take advantage of this opportunity by deploying AI shopping assistants directly in their e-commerce experiences.

Tech-savvy customers are already using AI-powered shopping assistants to help them find the right product or the best deal. In 2024, we expect this behavior to go mainstream.

Shoppers and businesses are making decisions in uncertain times, and the right technology can help create a sense of confidence for them both. Shoppers with limited time and inflation-constricted budgets can buy more confidently with the help of AI. Meanwhile, businesses are turning to technology that can provide reliable uptime and performance, as well as the ability to offer customers intelligent features like shopping assistants.

In 2024, retailers should develop business strategies to achieve profitable growth by looking at the data from the holiday season, as well as thinking about how AI will impact the road ahead.