A Powerful Peak: 2024 Holiday Shopping in Hindsight

For consumers, peak season is the thrill of the hunt, and the big game they want to bag is a big deal. Retailers obliged – although not quite as generously as last year. Salesforce reported that the global average discount rate was 26%, with the US at 28%, both down 1% YoY. Perceived savings also factored in the US, with retailers warning shoppers to “buy before tariffs hit” next year and hike prices. Makeup topped the global average discount rate at 40% with beauty holding a significant pre-and post-share of holiday purchases (prestige brands, in particular, have Gen Alpha to thank for that). “People are shopping selectively,” commented John Batistich. “In Australia, two-thirds of sales for Black Friday-Cyber Monday came from discounted items.” David Roth added: “There is a lot of stress on disposable income in many markets, so consumers definitely responded to the deals on offer.” In China, economically squeezed consumers benefited from a $20.7 billion government subsidy scheme offering money back for trading in and upgrading old appliances.

The use of AI has ramped up dramatically since Holiday 2023. Amazon beta tested its AI chatbot Rufus in Europe after a successful deployment in the US. In-app AI Shopping Guides also made their debut in the US on Amazon in time for peak season. “Amazon has been using forms of AI for 25 years,” according to Helmut Rieder. “This year it’s just gone into overdrive – used to hyper-personalize offers, create content and optimize deals.” While AI chatbots surged in popularity, John Batistich said the technology is crude compared to what’s coming. “AI-driven virtual agents, like those created by Versa, will quickly take over. In the next 12 months, conversational AI and customer contact will be completely transformed.” In China for Singles’ Day, AI was ubiquitous. Alibaba challenger JD.com offered a suite of AI-powered tools for merchants, intended to speed set-up and slash operational costs. One of the innovations was an avatar generator for 24/7 livestream shopping, launched earlier this year, and demonstrated using JD founder Richard Liu as an AI-driven virtual host.

Two of our key trends in “The Power of Peak” were “The Chinese marketplace challenge” and “Social Commerce goes live, influencers thrive”. Both came to the fore in this peak season. In the US, TikTok revenue rocketed 165% over 2023’s Black Friday-Cyber Monday, with 4 billion #tiktokshopblackfriday views and $100 million sales on Black Friday alone, triple last year. While that is less than 1% of total US Black Friday sales, TikTok has real momentum. “TikTok Shop will be the next big thing,” Helmut Rieder predicted. “Amazon made One-Click shopping famous, and in-app shopping on TikTok is this generation’s equivalent. It’s just so easy.” Rieder also warned not to underestimate Temu. “It feels like 20 years ago when Amazon was already big, and no-one was talking about it. Temu is the same – it’s already stealing a lot of business. Hence the launch of Amazon Haul.” TikTok Shop’s success was driven by creators and influencers, with a shopping livestream in the US hosted by Nicki Minaj becoming the highest-viewed TikTok Shop Live in the app’s history – 172 million views. Livestreaming is still in its infancy in the West compared to China though, where it drove Singles’ Day sales. “There are now over 15 million professional livestreamers in China, which is about one in every 100 people,” noted Aadit Bimbhet. “The Chinese government has even officially recognized livestreaming as a profession.”

We are well past the tipping point for mobile as shoppers’ preferred device, and this year’s peak season emphatically underlined the point. “Shopify data showed the split between mobile and desktop shopping at 76% versus 24%,” said Kate Carnevale. “Retailers with a strong mobile shopping experience won out.” The difference today is mobile moving from browsing to buying. Now it is a conversion vehicle – shoppers are increasingly comfortable with making even high-value purchases from their smartphones. Meanwhile, growth in store sales was anaemic and traffic to bricks-and-mortar down as much as 8%. But David Roth says don’t count out physical retail during the peak season. “Physical retail will come into its own as we get closer to Christmas, and consumers start to worry about online delivery in time for the big day.” Also, even during Black Friday-Cyber Monday, 27% of orders were click-and-collect from the store.

This year’s peak season was bigger and broader than ever before – in terms of both the length of the sales period and the geography. “Black Friday weekend is no longer a North American phenomenon - it’s a global shopping event,” observed Kate Carnevale. “Our merchants’ sales in EMEA increased 39% since last year, and in APAC they grew 29% since last year.” In Brazil, Black Friday events saw online sales increase by 11% from Thursday to Sunday. The Middle East’s version of Black Friday – White Friday – generated a reported 40% more revenue year-on-year. Singles’ Day too has become a significant retail event beyond its home borders. “It’s big in SE Asia via Shopee and Alibaba’s Lazada,” said Aadit Bimbhet. “And that’s a major market – 675 million people.” Beyond Asia, Singles’ Day is gaining recognition in Western markets with, for example, 41% of consumers familiar with Singles’ Day in Germany.