Get ready for a short and competitive 2024 Christmas shopping season as mobile devices, the election, email, and social commerce take center stage.
What follows are five holiday-shopping predictions, input from AI, and a report card of my forecasts last year.
54% on Mobile
In 2023, slightly more than half of U.S. online purchases from November 1 and December 25 came from mobile devices, accounting for approximately $113.5 billion, according to Adobe. This year, mobile will represent 54% of holiday ecommerce sales.
Three factors drive the growth: age, marketplaces, and buy-now pay-later options.
First, there is the age factor. Gen Z shoppers (ages 18 to 25) are more likely to purchase from a mobile device, and some 15% of Gen Z consumers buy directly from social media sites, according to Emarketer. Social commerce is mobile-friendly, doubling the impact.
Second, Amazon and other massive marketplaces accounted for more than half of holiday sales last year. These marketplaces offer native mobile apps that make shopping from a smartphone effortless.
Third, BNPL is increasingly popular for Christmas purchases. It’s often associated with relatively large retailers and marketplaces, which may offer a better mobile shopping experience.
5% Increase in Ecommerce
Early predictions from Emarketer, ecommerce platform makers, and others had the 2024 Christmas shopping season growing to $271 billion, a 23% increase from the $222.1 billion in 2023.
That is too optimistic, given the contentious U.S. election, inflation, and other economic woes. I’m predicting a 5% increase this year.
Email Volume Grows 25%
In 2024, we will continue to see growth in email marketing.
For example, last year Sinch Mailgun, which provides email infrastructure services, reported a 16% year-over-year increase in email volume for the Black Friday to Cyber Monday weekend. For all of November 2023, the volume rose 22% over the prior year.
The Christmas shopping season is relatively short in 2024 — just 29 days — which could make digital advertising more competitive and expensive. Marketers will turn to email to boost sales.
40% of Gen Zs Use Social
A recent survey of Gen Z shoppers found that about four in 10 will use some form of social commerce during the 2024 Christmas shopping season.
TikTok Shop, launched in September 2023, generated $11.9 billion in gross merchandise volume in 2023. TikTok does not typically share performance results, but it is reasonable to assume growth. Add the increase on other platforms, and social commerce in 2024 could be significant.
BNPL 9% of Retail Sales
For the second consecutive year, I predict that BNPL will represent 9% of total U.S. online holiday sales.
I overestimated last year’s BNPL growth, which was 7.4%. However, a recent Experian survey found that about 25% of American consumers plan to use BNPL this year. Thus I’ll stick with 9% growth for 2024.
Moreover, the ratio of in-store to ecommerce sales is leveling out. In 2023, ecommerce represented 34% of U.S. holiday sales, up one percentage point from the prior year. Brick-and-click retailers will find more ways to get shopping into physical locations. One of those ways is to promote BNPL offers in-store.
AI Predictions
After completing my list of five 2024 holiday predictions, I asked three generative artificial intelligence tools to do the same, using this prompt:
“Based on historical data and recent projections, make five bold predictions about the 2024 holiday shopping season for an audience of retail and ecommerce professionals.”
ChatGPT 4.o (by Open AI)
ChatGPT 4 by OpenAI
- Expect social commerce to account for nearly 20% of all online holiday transactions.
- Sustainability will become a critical factor for consumers during the 2024 holiday season. Expect a 25% increase in sales for retailers offering carbon-neutral shipping, recyclable packaging, and sustainably sourced products.
- Omnichannel fulfillment will dominate, with same-day delivery as the norm.
- Mobile shopping will outpace desktop and in-store experiences, with more than 70% of holiday ecommerce transactions occurring on smartphones.
Grok-2 Beta (by X)
Grok-2 Beta by X
- Mobile commerce will dominate. Over 60% of all ecommerce transactions during the holiday season will occur on mobile devices, driven by enhanced mobile payment solutions and an increase in mobile-first consumer behavior.
- Social commerce will rise. Retailers who integrate seamless in-app purchasing experiences could see up to a 30% increase in sales directly through social media.
- Despite the holiday season being structurally shorter, the intensity of shopping activities will spike earlier and more sharply. Retailers will start their holiday promotions as early as late October, with a significant emphasis on pre-Black Friday deals.
- AI personalization and predictive shopping will blossom. Retailers will use AI to not only suggest products but to predict what consumers might want before they explicitly search for it, potentially increasing conversion rates by offering personalized “surprise and delight” deals. This could lead to AI influencing over 25% of online holiday purchases.
- With increasing awareness about environmental issues, sustainability will become a significant factor in purchasing decisions.
Gemini (by Google)
Gemini by Google
- We’ll see mobile devices account for over 60% of all online holiday shopping traffic and close to 50% of total online sales.
- AI-powered personalization will go mainstream, with retailers using customer data and predictive analytics to create highly targeted product recommendations, offers, and experiences.
- Social media platforms will become major players in the holiday shopping landscape.
- Sustainability drives purchase decisions. Consumer awareness of environmental and social issues will reach new heights, with shoppers increasingly choosing brands and products that align with their values.
- Supply chain disruptions will continue. Despite efforts to mitigate disruptions, ongoing challenges like port congestion, labor shortages, and material scarcity will persist, impacting product availability and pricing.
Last Year’s Predictions
Since 2013 I have predicted ecommerce trends and sales for the coming holiday season. Here’s how my 2023 forecast went.
Holiday spending grows less than 5% — correct. The National Retail Federation put total holiday sales growth at 3.8% in 2023. Emarketer set the 2023 holiday season growth rate at 3.9% while others had it as high as 4.9%, which was below the 5% prediction. By comparison, in 2022 year-over-year U.S. holiday spending grew 8.1%.
Buy-now pay-later accounts for 9% of retail sales — wrong. While the number of BNPL transactions grew 14% last year, they totaled just $16.6 billion, according to Adobe Analytics — 7.4% of sales.
Discounting drives sales — correct. This prediction was easy, with some estimates concluding that 60% of Christmas orders in 2023 had at least one sale item. Emarketer put it this way, “Deep discounts drove consumer spending across the Cyber Five in 2023.”
Shoppers wait for those discounts — correct. While U.S. Veteran’s Day (November 11) sales remained relatively flat from 2022 to 2023, Black Friday retail sales enjoyed a 7.5% year-over-year increase, and ecommerce leaped about 19%. Shoppers waited for the Black Friday and Cyber Monday discounts.
Generative AI impacts product discovery — unknown. This prediction is difficult to measure. I could not find data on how generative search results had impacted holiday purchase behavior.