(Reuters) – After lackluster spending at U.S. stores on a deals-heavy Black Friday, retailers will be pulling out all the stops with steep promotions on their websites and apps to entice people to buy holiday gifts and other merchandise after the long Thanksgiving weekend.
Retailers have been coaxing cautious U.S. shoppers on Cyber Monday with push notifications, emails and other ads touting heavily discounted cosmetics, electronics, toys, clothing and other products. Many including Walmart and Amazon use AI-enabled chatbots on their websites and apps to help customers with queries and drive them to hit ‘”buy.”
With just 23 days before Christmas, the discounts this year have been deeper with shoppers waiting for promotion heavy days, experts have said.
For instance on Cyber Monday, traditionally America’s biggest internet shopping day, Target said it was offering 50% off thousands of items including video games, home decor and other tech with a “two-day Cyber Monday” sale that started on Dec. 1.
The promotions follow a mixed holiday season so far with muted spending in stores on key shopping days such as Black Friday.
Sales at brick-and-mortar stores on Black Friday grew just 0.7% year-over-year, according to preliminary estimates by payments processor Mastercard, and were lower according to data firm Facteus.
“(Consumers are) more strategic in their shopping, though, prioritizing promotions that they believe hold the greatest value — opening their wallets but with more intentional distribution,” said Michelle Meyer, chief economist at the Mastercard Economics Institute.
Spending online on Monday in the U.S. is expected to reach $13.2 billion, 6% more than on Cyber Monday a year earlier, according to preliminary estimates from Adobe Inc. That outlay would follow the roughly $10.8 billion Americans spent online on Black Friday, according to Adobe.
With many Americans recently carrying more debt, shoppers are also expected to spend a record $18.5 billion using third-party ‘buy now, pay later’ services for holiday purchases in the last quarter of the year, according to projections by Adobe, which keeps track of devices that use its software to help power more than 1 trillion visits to U.S. retail sites.
This year, big retailers like Walmart and Amazon have also relied on generative AI customer service and search features to make it easier for shoppers to find products on websites and mobile apps.
Caila Schwartz, director of consumer insights at Salesforce, a cloud-computing company that tracks global shopping data from more than 1.5 billion consumers, said that GenAI tools such as chatbots to answer online shoppers’ basic questions, such as queries about products, helped retailers protect their profit margins despite rising costs.
Across the first half of Cyber Week – the week starting ahead of Thanksgiving and ending on Cyber Monday – those retailers that used GenAI tools for customer service saw a 9% higher purchase rate by users, according to estimates by Salesforce.
Schwartz said the higher so-called conversion rate “is a game-changer.”
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Nick Zieminski)
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