Instead of “let it snow,” retailers are hoping consumers make it rain—and they may get their wish during Cyber Week.
Salesforce announced Wednesday it forecasts that Cyber Week sales will hit $311 billion globally—or 23 percent of all holiday purchases this year. The technology firm, which defines Cyber Week as the period between Nov. 26 to Dec. 2 this year, expects $75 billion worth of those sales to come from U.S. consumers.
That optimism comes despite a slight downturn in sales in the early days of the holiday shopping season.
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Salesforce saw a 1 percent decline in global e-commerce sales between Oct. 1 and Nov. 14 as compared with 2023. Caila Schwartz, director of consumer insights and strategy for Salesfroce, said she attributes most of that decline to the first few days of October; at the time, part of the East Coast was in early recovery from the effects of Hurricane Helene, soon followed by Hurricane Milton.
“There was a lot going on…[and] especially the U.S. consumer was a little distracted, so it was a soft early October. But what we are seeing in our data right now is some strong pickup as we head into the Cyber Week period,” she said.
Some categories are faring better than others when it comes to consumer interest. Salesforce’s data shows that, during the same period of overall decline, makeup sales increased by 10 percent year on year; active footwear has seen a 9 percent boost compared with 2023 and handbags and luggage have seen an 8 percent uptick compared with last year.
During the first week of November, sales have started to pick up; Schwartz said sales, discounts and global online order volumes all increased. That volume increased by 4 percent year on year is a significant metric, she noted.
“That is significant because we have not seen online order volumes increase all year. Consumption has either been flat or negative, so even though consumers might have been spending incrementally more money, they weren’t buying more goods, placing more orders. But that was not the case in November week one, so this signals to me that we’re seeing really strong demand start to percolate ahead of the Cyber Week period,” Schwartz explained.
Part of the excitement from consumers may be coming from a build-up to the seasons’ highest discount rates. In the first week of November alone, discount rates increased by 17 percent compared with 2023, coming in at an average slash of 20 percent.
Salesforce projects those discounts will only grow once consumers find them fully in the thralls of Cyber Week. The technology company expects the global average discount rate to come in at 28 percent globally, with the U.S. outpacing that and hitting a 30 percent average discount rate.
Apparel is expected to have the second-highest discount rate by category, with a projected average of 33 percent savings for consumers. It tied for second with skincare and was usurped only by a forecasted 38 percent average discount on beauty and makeup products.
Salesforce anticipates consumers will take full advantage of the discounting schemes available to them during Cyber Week; it has predicted that 24 percent of all global holiday sales will happen during the discount-driven frenzy, up 5 percent since 2023.
“Discounts are going to have a really outsized impact on shaping demand this holiday season, because the consumer is so price conscious,” Schwartz said.
Front-loading discounts ahead of Black Friday and Cyber Monday paired with deep discounting throughout Cyber Week could also be a signal that brands and retailers have an intense interest in retaining their customers. That has become especially important as some shoppers have developed a keen interest in shopping on what Salesforce calls “Chinese shopping marketplaces,” which includes sites and apps like Temu, Shein, TikTok Shop and AliExpress.
Salesforce’s data shows that two-thirds of shoppers who use apps like these intend to make purchases from them this holiday season. But the interesting part about that is that most of the consumers purchasing items from the likes of Shein, Temu and others aren’t ordering their ultra-low-cost goods as gifts.
Among consumers who do not purchase from the so-called Chinese shopping apps, the number one reason for that was a lack of trust in data and payment handling, followed closely by a lack of faith in product quality, according to Salesforce. Schwartz said she hypothesizes the same beliefs about quality prevent those using apps like Shein and Temu from purchasing items as gifts.
“They’re buying for themselves, and they’re buying for their families; almost 70 percent of consumers said that’s what they’re buying over the holiday period—holiday decorations, holiday outfits for their family, things they might need around the house. That’s where we see these marketplaces playing a role.”
