Consumer behavior is unpredictable – some key experts were concerned that Black Friday 2023 may underperform, but that turned out to not be the case. In fact, Adobe Analytics reported record ecommerce sales with $9.8 billion spent online on Black Friday and $12.4 billion spent on Cyber Monday, which were increases of 7.5% and 9.6% year over year (respectively).
Furthermore, shoppers are spreading out their spending – Mastercard SpendingPulse projects that in-store and online retail sales growth for Nov. 1 to Dec. 24 will reach 3.7% YoY.
For its annual holiday shopping report, Coveo worked with RSR Research on a retailer-side survey that predicted some of the above shopper behavior as seen through the retailer lens. The survey was conducted with qualified US-based retail respondents representing 92 retailers, most with revenues above $250 million.
The same research team also explored some forward-looking aspects, including which priorities of large retailers will shape 2024 ecommerce planning. As part of these insights, we highlight strategies that high-performing retailers (those with revenue growth above the average 7%) are undertaking, especially if they differ from the approaches of average- or lower- performing retailers surveyed.
Here are key takeaways for retail brands to consider as they head into the new year:
Large retailers are implementing commerce generative AI strategy.
Of above-average retail performers surveyed, 93% have either implemented some automated capabilities using generative AI technologies or are experimenting with them for possible implementation next year; of average or lower-performing retailers, 67% are reporting the same. Also, upwards of 4 out of 10 retailers surveyed overall said they are aggressively pushing consumers towards online service chatbots and FAQ pages to help control the volume of service calls. As ecommerce continues to evolve, especially with the influence of AI and generative AI, retailers will increase their adoption of these new approaches to their competitive strategies while also quickly implementing new technologies.
Retail brands with above-average growth are reporting a greater focus on (and investment in) establishing relevance.
At least 50% or more of high-performing retailers surveyed said they have increased their investment in CRM (59%), ecommerce platforms (55%), payment processing and inventory management (52%) and AI/personalization initiatives (50%) this year, as compared to last year. Meanwhile, only 15% of underperforming retailers surveyed said that they increased their ecommerce platform investments this year (24% for order, payment processing and inventory management and 35% for AI search, recs and personalization). This shows that there is an opportunity for slower-growing large retailers to increase their 2024 ecommerce tech investments as they attempt to emulate the top performers in revenue growth.
Retailers know they need to up-level how they address consumer demand for relevant offers, despite the guest shopper challenge.
More than half of all retailers surveyed said their customers log in only a quarter of the time while shopping. To counterbalance the guest login challenge, top-performing retailers are trying the following strategies:
- 59% aggressively publicize a loyalty platform to be able to personalize the shopper experience with highly relevant offers based on preferences, purchase history, and behavioral models (“personas”)
- 55% use in-session behavior data to determine personalized offerings in real-time
- 47% make value offers at check-out when customers ID themselves
Consumers don’t make it easy to personalize, but retailers must find ways to share relevant, compelling offers that keep their shoppers coming back.
Fashion and specialty retailers have a big opportunity to grow in 2024 by being strategic about product discovery.
Of the fashion and specialty retailers surveyed, 33% of buyers march straight to the brand’s website, which far outpaces the customers who begin with Amazon (just 17%). A further 36% of shoppers begin their online journey either with a Google search (22%) or turn to social media as a first step (14%). With so many shoppers heading to brand websites and search/social first, fashion and specialty retailers have the upper hand with product discovery and should prioritize initiatives that start customers on the right foot with a stellar experience through product discovery, relevant offers, and social proof.
Overall, while uncertainty of consumer behavior continues to challenge retailers, it also presents opportunities and pleasant surprises such as the record-breaking spending we saw with the most recent Black Friday peak. As we look ahead to 2024 ecommerce trends, the data shows that retailers must continue to focus on making online shopping easier in every way: product discovery and search, personalized offers, order tracking, and customer service. As retailers invest more into establishing relevance, an area that will be further supported with generative AI,they will continue to bridge the gap with guest shoppers, deepen relationships with repeat visitors and appeal to new shoppers across various channels.
Sergio Iacobucci is the senior director of commerce marketing at Coveo, a leading provider of enterprise AI platforms that enable individualized, connected and trusted digital experiences at scale with semantic search, AI recommendations and generative AI answering. Over his 10-year career in commerce, he has advised some of the largest brands in the world and, curently, Iacobucci spends his time keeping up to date on the latest trends and educating the market on how to boost KPIs.
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