In our latest webinar, we explored the trends, opportunities and challenges that will shape digital retail success in 2025. Sucharita Kodali, VP and Principal Analyst at Forrester Research, shared her expert insights and predictions for the year ahead, setting the stage for a dynamic panel discussion with retail leaders. Attendees gained actionable takeaways to stay ahead in the evolving digital landscape.
What we learned:
- Takeaways from the 2024 holiday retail season
- The importance of mobile experience in retail
- Challenges for Chinese competitors in ecommerce
- How to adapt to new search behaviors
- The impact of tiktok shifts and tariff changes
Speakers:
- Sucharita Kodali, VP and Principal Analyst, Forrester Research
- Noam Paransky, Board Member, ThredUp
- Michelle Pacynski, VP, Digital Innovation, Ulta Beauty
- Bill Bass, CMO, FULLBEAUTY Brands
- Jaysen Gillespie, Vice President, Global Product Commercialization, RTB House
- Moderated by: Allan Dick, Co-Founder, CommerceNext
Watch the replay here or read the recap below.
Takeaways from the 2024 Holiday Retail Season
Sucharita Kodali, VP and Principal Analyst at Forrester Research, shared insights into how the 2024 holiday retail season compared to expectations. Leading up to the season, forecasts, including Forrester’s, predicted a 3% growth in overall retail sales, which aligned closely with inflation rates, indicating a positive but modest performance. Online sales were expected to grow between the mid-single digits and 10%, with Forrester predicting the higher end. In reality, retail growth remained around 3%, occasionally dipping slightly lower, while online sales fell within the lower end of expectations, in the mid-to-high single digits. While the season showed positive growth, it didn’t exceed expectations, reflecting steady but not outstanding results.
How the 2024 Holiday Sales Played Out
Kodali highlighted that in 2024, most holiday sales were in in December, largely due to the compressed holiday season, which negatively affected sales in November. Additionally, the election season distracted some shoppers. Despite these challenges, the period between Thanksgiving and December 25th saw nearly $167 billion in sales, with some additional sales happening in the final days of December. A significant portion of the $65 billion in sales across these days happened online; the two biggest days for online sales were Thanksgiving and Cyber Monday.
The Importance of Mobile Experience in Retail
Forrester Research emphasized the need for retailers to revisit the mobile experience in light of shifting consumer behavior. While the industry has heavily invested in mobile in prior years, the mobile user experience has not been a retailer focal point more recently. Despite mobile commerce now accounting for over half of ecommerce sales, many companies still haven’t fully optimized their mobile interfaces for smaller screens. Kodali pointed out that at the NRF Big Show few vendors highlighted mobile-specific offerings, underlining the industry’s lack of attention to this area. With mobile commerce having lower conversion rates than desktop, improving the mobile experience is essential to avoid missing out on potential sales. Retailers should ensure their mobile interfaces are as strong and user-friendly as possible to keep up with the growing dominance of mobile shopping.
Challenges for Chinese Competitors in Ecommerce
Chinese ecommerce platforms like Temu, Shein and TikTok Shop face several challenges that could affect their long-term success. A key issue is product quality, with both Temu and Shein often criticized for inconsistent quality and lack of strict quality control, leading to customer dissatisfaction and lower loyalty. Additionally, these platforms struggle with long shipping times, often promising long delivery periods, which fall short of customer expectations, especially when compared to fast shipping services from competitors like Amazon. The user experience remains a challenge. Despite their rapid growth, these platforms struggle with usability issues that prevent them from delivering a shopping experience as seamless as that of more established competitors.
Kodali also pointed out that TikTok Shop is attracting Gen Z shoppers through engaging content and influencer recommendations. This has led to the platform developing as a form of search, and TikTok is now competing against traditional search engines like Google, which has faced criticism for low-quality results. Even with TikTok’s uncertain future in the U.S., as these platforms grow, addressing operational and customer experience issues will be crucial to maintaining growth and staying competitive.
How to Adapt to New Search Behaviors
Ulta Beauty emphasized the importance of retailers and brands adapting to changing search behaviors by creating rich, engaging content which goes beyond basic product details. Engaging content provides valuable information that could be picked up by search engines and platforms like Perplexity. By improving SEO, website structure and SEM strategies, brands can ensure they appear in relevant search results, ultimately driving traffic back to their own sites. Monitoring these shifts and understanding consumer behavior is essential for staying competitive.
ThredUp added the need to optimize for both human users and bots. As search becomes more conversational, brands need to focus on answering customer questions and solving problems, ensuring their content remains relevant across various platforms. Preparing for both types of traffic is crucial.
FULLBEAUTY Brands highlighted the success of syndicating content to big marketplaces like Amazon, Walmart, Macy’s and Nordstrom. This strategy helped them reach new customers without negatively impacting their direct traffic. While driving visitors to their site remained important for long-term value, syndicating sales to these larger platforms allowed them to reach wider audiences and grow their customer base.
The Impact of TikTok Shifts and Tariff Changes
RTB House touched on the uncertain status of TikTok in the U.S. TikTok creators, for example, were recently alarmed by the temporary shutdown of the app, pushing many to consider spreading their content across multiple channels. For marketers, this raises the question of how much of their TikTok audience will stay. These uncertainties call for marketers to diversify channels as a precaution.
Businesses are also dealing with tariff changes that could affect their operations. RTB House emphasized that governments might use tariffs as a negotiation tool, which could impact various industries globally. Companies with diversified strategies are more likely to navigate these changes effectively, while those relying on a narrow set of markets or platforms may face greater challenges. Businesses need to prepare for both shifts by ensuring they have anti-tariff marketing strategies and the ability to adapt quickly to changes in consumer behavior.
For more tips and strategies to tackle retail’s challenges in 2025, sign up for the 2025 CommerceNext Growth Show, taking place in NYC on June 24-26.
