Online Holiday Sales Growth Projected to Decelerate by Salesforce Amid Consumer Caution

Market Overview: Slower Growth Anticipated for Online Holiday Sales

Salesforce projects U.S. online spending between November 1 and December 31, 2025, to increase by 2.1%, reaching $288 billion. This marks a notable deceleration from the 4% growth observed during the same period last year, which totaled $282 billion. The forecast aligns with broader industry expectations from consulting firms such as Deloitte and PwC, indicating a more subdued holiday shopping season compared to previous years.

Consumer Behavior Shifts Amid Economic Headwinds

The anticipated slowdown in growth is primarily attributed to evolving consumer behavior driven by rising living costs and persistent economic uncertainty. Shoppers are expected to become increasingly price-conscious, prioritizing essential purchases and actively seeking deeper discounts across product categories. This shift implies a reduction in discretionary spending. Retailers are consequently expected to adopt more cautious promotional strategies, with a slight dip forecast in the number of orders utilizing promotional codes, as brands contend with higher supply chain costs. During Cyber Week, the five-day period from Thanksgiving through Cyber Monday, average discount rates in the U.S. are projected to reach 29%, with the most significant deals anticipated in general apparel, health & beauty, and home furnishing categories.

Retailer Responses and Mixed Forecasts

Major retailers have presented a mixed outlook for the crucial holiday season. While Walmart (WMT) and Macy's (M) have raised their annual forecasts, signaling optimism in their specific segments, toymaker Mattel (MAT) has cut its outlook. Target (TGT), another significant player, has maintained its annual expectations, reflecting a cautious stance. Following the release of this forecast, Salesforce (CRM) experienced a 1.66% decline in early trading, positioning it as the biggest loser among Dow stocks. This varied performance underscores the divergent impacts of the current economic environment on different retail sub-sectors and individual companies.

The Role of Artificial Intelligence in E-commerce

A significant trend highlighted in the forecast is the growing influence of artificial intelligence (AI) in driving online sales. Salesforce estimates that AI-powered recommendations and agent-assisted shopping will contribute $51 billion to U.S. online sales, accounting for 18% of the total projected revenue. This indicates a strategic shift towards leveraging technology to personalize customer experiences and streamline purchasing decisions, potentially mitigating some of the challenges posed by tighter consumer budgets and increased price sensitivity.

Broader Implications for the Retail Sector

The forecast suggests a challenging holiday season for many retailers, potentially leading to lower-than-expected fourth-quarter earnings for those unable to adapt to shifting consumer demands. The emphasis on essential goods and discount-seeking behavior could benefit discount retailers while pressuring luxury or discretionary spending-focused segments. The broader implication points to continued economic headwinds affecting consumer confidence, which could negatively impact overall market sentiment, particularly for the Retail Sector and E-commerce Sector stocks, including large players like Amazon (AMZN). Caila Schwartz, Director of Strategy and Consumer Insights at Salesforce, expressed concerns regarding the potential impact of import fees on e-commerce, suggesting:

"One of the things that we are ... potentially concerned about is if more consumers get more surprises from import fees than they do now from carriers, that could potentially have an impact on e-commerce."

Analyst Commentary and Forward Outlook

The consensus among analysts and consulting firms like Deloitte and PwC is that consumers will prioritize value and essentials, making the holiday season a "balancing act" for retailers. Future monitoring will focus on actual sales figures against these subdued forecasts, the efficacy of AI-driven sales strategies, and any shifts in consumer confidence as economic indicators evolve. The cautious promotional strategies by retailers, coupled with the potential impact of supply chain costs and import fees, will be critical factors determining profitability in the coming months. The ability of companies to optimize inventory and adapt to price sensitivity will likely differentiate performance within the sector.