4 holiday shopping trends, and what they mean for ecommerce in 2023

The trend: Good deals drove sales

This holiday season was expected to be highly promotional, and it ended up playing out that way. Salesforce observed a 21% discount rate, compared with 19% in 2021. Beauty, skincare, and makeup were the most discounted categories at 29%, while general apparel and handbags reached 27%.

What it means for 2023: While the calendar turned, the tougher consumer environment didn’t change. People are still seeking to stretch dollars as the effects of inflation and interest rates filter out across the economy. Discounts will remain a key tool to convert, but it will be a tricky path for brands and retailers to maintain margins, especially after increasing prices to keep up with inflation last year.

The trend: Returns hit record highs

Salesforce predicted a returns “tsunami” and it seems that it arrived. The 1.39 billion items returned amounted to a 63% year-over-year increase in returns from 2021. In the six days after Christmas, 16% of orders were returned, which was a 5% increase over 2021.

What it means for 2023: The “staggering” numbers offer a sign that consumers are “cautious,” Garf said. One of the behaviors that Salesforce identified during Cyber Week was people returning items after finding a better deal. These types of behaviors will only continue as the economic picture remains difficult. Brands and retailers should be mindful of how returns pressure profits and logistics. As Loop Returns has shared with The Current, there’s also customer expectations to consider, as many have grown accustomed to free and easy returns. That’s why retailers are also rolling out new ways to make returns more convenient like box-free and even returns pickup from DoorDash. Remember: returns are a customer touchpoint, just as much as a logistics function.

The trend: In-store pickup delivers growth

Buy Online Pickup in Store, or BOPIS, was one of the modes to get orders to customers that grew in the pandemic. Even with the return to in-store shopping this year, consumers continued to turn to this method out of convenience. Quick data points:

• Nearly one in five of all online orders were fulfilled via BOPIS.
• Adoption peaked at 35% of all orders on the Friday before Christmas.
• After the window for home delivery closed, Salesforce said that companies with BOPIS grew revenue 7x faster than those without in the final week before Christmas.

What it means for 2023: Even with the return to in-store shopping, ecommerce is continuing to be sought out as a means of convenience. But customers often don’t see channel, and are comfortable moving between both to fit their lives. The staying power of BOPIS over the holidays is a manifestation of this physical-digital crossover. Continuing to pay attention to what customers want and improving the experience will be crucial. Another area to consider: How are brands and retailers merchandising in the store around BOPIS? Remember: A pickup is a visit to the store. What are the options to upsell?

The trend: Social media referrals hit an all-time high

More and more of commerce is being mediated through social channels, where shoppers discover products through ads and content, then complete the purchase through links to brand stores. Traffic referrals from social media grew 23% this holiday season, accounting for 12% of all mobile traffic. The U.S., Belgium and Italy had the most social shoppers.

What it means for 2023: Social is still a key investment area for brands and retailers to drive new traffic to their online stores. In 2022, there was plenty of fretting about broken digital marketing playbooks as a result of iOS14.5 changes to tracking and attribution that hampered the growth engines of advertising on platforms like Facebook and Instagram. Brands experimented with other platforms like TikTok, and even brought back catalogs. But the Salesforce data offers a reminder that social media is continuing to be a primary place to meet brands, and power discovery. The tools and even platforms may change, but the medium will remain, and still has room to grow.

The bottom line: Garf put it this way: "In 2023, retailers must double down on efforts to put the customer at the center of their business with data-driven personalization and efficient operations in areas such as fulfillment, service, and returns."