AI Chatbots Drive Online Sales Surge During US Holiday Season: Salesforce
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Artificial intelligence (AI) played a significant role in boosting online sales during the recent holiday season, Reuters reports, citing a report by Salesforce. The software company's analysis of data from 1.6 trillion page views on its platform reveals that AI-powered chatbots helped drive a nearly 4% year-over-year increase in US online sales.
Retailers strategically employed AI chatbots, alongside targeted promotions, product recommendations, and loyalty programs, to engage shoppers seeking trending products and the best deals. This strategic approach proved successful, as online sales in the US grew from $272 billion in 2023 to $282 billion this past holiday season, exceeding Salesforce's initial forecast of 2% growth.
"Retailers turned to nifty conversational customer services - or chatbots - among others such as targeted promotions, product recommendations and loyalty programs, to influence customers hunting for trending products and best bargains," states Reuters.
The report also highlights the significant increase in the use of AI-based chatbot services, with a 42% jump compared to the previous year. This AI influence extended globally, with AI-influenced sales reaching $229 billion worldwide, up from $199 billion in 2023.
However, the report also notes a concerning trend: a sharp increase in product returns, reaching 28% this year compared to 20% in 2023. This could significantly impact retailers' profit margins.
"A high rate of product returns by customers at 28%, compared with 20% in 2023 was a 'significant concern' and could reduce the overall profit margins for retailers," says Caila Schwartz, director of Consumer Insights at Salesforce.
Highlighting the growing importance of AI in retail, Schwartz adds, "Retailers who have embraced AI and agents are already seeing the benefits, but these tools will be even more critical in the new year as retailers aim to minimize revenue losses on returns and re-engage with shoppers."
The report also sheds light on the prominence of mobile shopping, with orders placed through smartphones peaking on Christmas Day. Approximately 79% of all orders during the holiday season were placed via mobile devices.
Beyond AI, social media platforms like TikTok Shop and Instagram also played a crucial role in driving traffic to e-commerce sites, generating 14% of all traffic. This underscores the growing importance of social media marketing in the retail landscape.