Artificial Intelligence Chatbots Boost Online Sales in 2024

(Reuters) – Artificial intelligence-powered chatbots helped consumers purchase and return products during the 2024 holiday season, boosting online sales in the United States by nearly 4% year-over-year, according to a report by Salesforce (NYSE:CRM).

Retailers implemented advanced conversational customer services, including chatbots, targeted promotions, product recommendations, and loyalty programs, to engage customers seeking trending products and the best bargains.

Online sales rose to $282 billion in the U.S. between November 1 and December 31 from $272 billion a year ago, exceeding Salesforce’s forecast of 2% growth, despite tempered discounts.

Shoppers utilized AI-based chatbot services 42% more than the previous year, as Salesforce analyzed data from 1.6 trillion page views on its platform.

AI-influenced sales climbed to $229 billion of global online sales this holiday season, up from $199 billion in 2023, according to the report.

However, product return rates were high at 28%, compared to 20% in 2023, posing a significant concern that could squeeze profit margins for retailers. Caila Schwartz, director of Consumer Insights at Salesforce, noted, “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.”

Orders via smartphones peaked on Christmas day as customers made last-minute purchases, with approximately 79% of all orders being placed through mobile devices during the holiday season.

In addition to AI, retailers leveraged social media platforms like TikTok Shop and Instagram to drive interest, with social media contributing to 14% of all traffic to e-commerce sites.