E-commerce

How AI Transformed Holiday Shopping

Ken Metral

06 Jan 2025 — 2 min read

Artificial intelligence played a pivotal role in boosting online holiday sales during the 2024 season, according to a Salesforce report. U.S. online sales climbed nearly 4% year-over-year, reaching $282 billion between November 1 and December 31, surpassing Salesforce’s initial forecast of 2% growth. Globally, AI-influenced sales surged to $229 billion from $199 billion in 2023.

AI Shopping Experience

AI-powered chatbots emerged as a key player, with usage increasing by 42% compared to 2023. These chatbots provided personalized customer support, assisting shoppers in purchasing and returning products more efficiently. Retailers also leveraged other AI-driven tools such as targeted promotions, product recommendations, and loyalty programs to engage customers searching for trending items and the best deals.

“Retailers who have embraced AI and agents are already seeing the benefits,” said Caila Schwartz, director of Consumer Insights at Salesforce. She emphasized that these tools will be increasingly critical in 2025 to reduce revenue losses from returns and to reconnect with shoppers.

Returns Erode Profit Margins

Despite the increase in sales, high return rates emerged as a significant challenge for retailers. Product returns reached 28% during the holiday season, up from 20% in 2023, potentially eating into profit margins.

Managing these returns efficiently while maintaining customer satisfaction will be a top priority for retailers in the coming year. AI could also play a role here, helping retailers optimize return policies and improve product fit recommendations to reduce the likelihood of returns.

Mobile Shopping Hits New Heights

Mobile devices dominated holiday shopping, with 79% of all orders placed via smartphones. Christmas Day saw a spike in mobile purchases as shoppers made last-minute orders. This trend underscores the importance of mobile-optimized e-commerce platforms and seamless shopping experiences.

Social media platforms like TikTok Shop and Instagram contributed significantly to holiday sales. These platforms drove 14% of all traffic to e-commerce sites, showcasing their growing influence in shaping consumer behavior and generating interest in products.

The Future of AI in Retail

The success of AI-powered tools during the holiday season signals their growing importance in the retail arena. As retailers look ahead, minimizing revenue losses from returns, enhancing customer engagement, and optimizing supply chains will likely involve even greater reliance on AI technologies.

The 2024 holiday season demonstrated that AI is no longer a luxury for retailers—it’s a necessity. By integrating AI into every stage of the shopping journey, from discovery to post-purchase support, retailers can not only boost sales but also build stronger, long-lasting relationships with customers.

Bluesky Secures $700M Valuation After User Surge

Bluesky, the decentralized social media alternative to X, is making waves. The platform, which has positioned itself as a safer and more idealistic haven for social networking, is in the final stages of raising a funding round led by Bain Capital Ventures, valuing the company at around $700 million, according

Not All Customers Are Good for Business

The old saying, “The customer is always right,” has a fatal flaw—it assumes all customers are worth keeping. In reality, some customers are costing you more than they’re worth. Ignoring this hard truth can derail your business. The Warning Signs of Expensive Customers Imagine getting a red-alert email

Anthropic Eyes $2 Billion at $60 Billion Valuation

Anthropic, a leading competitor to OpenAI in the artificial intelligence space, is reportedly in talks to secure $2 billion in funding, led by Lightspeed Venture Partners. This round would value the company at an impressive $60 billion, positioning Anthropic as the fifth-most valuable startup in the U.S., trailing SpaceX,

Alcohol-Free Drinks Are Booming

Dry January has become an annual ritual for many Americans seeking a reset after the indulgence of the holiday season. This year, nearly a third of Americans are expected to abstain from or reduce their alcohol consumption. While some aim to save money or shed a few pounds, others are