How retailers can win big with holiday e-commerce

Insights

• Holiday shopping peaks put massive pressure on retailers to deliver fast, stable, and secure e-commerce experiences.
• With rising competition, complex inventory demands, and soaring customer expectations, even small friction points can cost millions.
• AI-powered, MACH-based, and cloud-native infrastructures help brands scale, personalize, and streamline every step of the shopping journey.
• By strengthening e-commerce and omnichannel ecosystems, retailers can turn seasonal surges into sustained, year-round growth.

The holiday season is here, and shoppers are once again hunting for the biggest discounts and limited-time offers. As shoppers increasingly turn to digital channels and artificial intelligence (AI) to research, compare, and purchase products, retailers must ensure their e-commerce ecosystems are robust, scalable, and ready to deliver frictionless shopping experiences that can withstand the intensity of peak traffic.

Shopping peaks during late November and early December, with close to 77% of consumers actively shopping during that period. The annual US holiday retail forecast points to a solid but slower season – with lower- and middle-income households feeling financial strain, and even higher-income households slowing spending due to low savings – with sales expected to climb 4% from last year, reaching over $975 billion in November and December.

The preholiday season is the perfect opportunity for retailers to attract new customers, reengage loyal ones, and drive conversions through promotions, exclusive deals, and limited-time offers. Beyond the surge in sales, the holiday period also provides retailers with rich insights into consumer behavior, preferences, and purchase patterns that can inform future campaigns and inventory planning.

Retailers put to the test

The opportunities of the holiday season come with challenges. Retailers face pressure to ensure their websites remain stable, responsive, and secure as traffic skyrockets. A momentary slowdown, lag, or crash can lead to lost sales, frustrated customers, and damage to brand reputation, especially when shoppers have countless alternatives just a click away. Lululemon shoppers last year experienced a wave of checkout failures, with the system rejecting their entries, failing to validate details, and triggering error alerts. These hurdles caused customers to drop off before completing their purchase, leading to revenue losses for the brand. With an AI-powered composable commerce platform, the brand was able to diagnose where the problem was occurring, and eliminate the friction points, recovering tens of millions of dollars in lost revenue. Such platforms help by isolating the faulty checkout components, diagnosing the exact validation errors, and allowing quick, targeted fixes without having to overhaul the entire system.

Heightened competition and escalating marketing costs make it difficult for retailers to stand out. Brands must invest heavily in digital advertising, search optimization, and promotional offers to attract attention in an already crowded marketplace. At the same time, managing inventory across multiple sales channels is increasingly complex. Stockouts, delayed updates, and inaccurate visibility into supply can result in missed sales opportunities or overstocking, both of which erode profitability.

Customer expectations are higher than ever. With 80% of customers valuing experience on par with products and services, brands can no longer rely on quality alone to drive loyalty. Shoppers demand intuitive navigation, fast checkout, and transparency across the entire purchase journey. Any friction such as long loading times, confusing layouts, or limited payment options can lead to abandoned carts. A survey reveals that over 80% of organizations expect customer experience (CX) to be their primary competitive differentiator, making the ability to deliver and realize CX-driven benefits a sought-after skill. Additionally, the risk of cyberattacks and payment fraud spikes during peak shopping periods, adding yet another layer of complexity for retailers to manage.

While the holiday season promises revenue growth, it also exposes weaknesses in digital infrastructure, scalability, and user experience. Retailers that lack the right technology foundation and operational agility risk losing not just sales but long-term customer loyalty. The challenge is to transform the seasonal rush into a well-orchestrated opportunity that drives growth, trust, and repeat business.

From short-term fixes to long-term digital strength

To succeed in this high-stakes period, retailers need more than short-term fixes. They need an e-commerce foundation designed for resilience, scalability, and smooth performance. This involves modernizing their technology stack to a composable architecture, powered by microservices, API-first, cloud-native, and headless (MACH) principles to handle heavy traffic loads. This integrates AI and analytics for real-time insights, ensuring every customer interaction, from browsing to checkout, is fluid and consistent.

Cloud-based architectures, scalable hosting solutions, and API-driven integrations can help brands respond dynamically to fluctuations in demand without compromising site speed or stability. At the same time, adopting robust cybersecurity and fraud-prevention systems ensures consumer trust at every transaction. To overcome service spikes and scaling challenges, Sweden’s Nordic Nest adopted a MACH architecture setup. The solution integrated enterprise resource planning, customer relationship management, and warehouse management systems, giving teams centralized access to customer data and improving service speed. During the Black Friday period, the retailer processed five sales per second and onboarded 400 staff effortlessly. The brand also studies social behavior in advance to know what products people are buying, so it can be prepared.

Equally important is the focus on user experience. Simplified navigation, mobile optimization, and streamlined checkout processes can reduce friction and boost conversions. After developing a progressive web app (PWA) that offers a fast, seamless, and reliable mobile experience, Alibaba saw total conversions jump by 76% across browsers. When backed by the right technology infrastructure and proactive planning, these efforts help brands turn the chaos of the holiday rush into a strategic advantage, delivering smooth shopping experiences at scale while safeguarding performance and profitability.

How to win at the holiday rush

To prepare for the holiday surge, retailers should implement proactive, data-driven, and customer-centric measures:

Conduct load and stress testing: Retailers must simulate high-traffic conditions in advance to evaluate system performance under pressure. Load testing identifies weak points and helps ensure the website remains stable even during peak spikes. Investing in scalable hosting and content delivery network solutions can minimize downtime, reduce page load time, and maintain global responsiveness by caching data on servers geographically closer to the user, which improves performance and user experience.

Strengthen infrastructure and security: E-commerce sites face heightened vulnerability during the holidays, with surging traffic and leaner security teams creating openings for cyberattacks. Data shows a 30% global increase in attempted ransomware attacks during the season. This makes it imperative for retailers to build resilient e-commerce sites and reinforce both back-end systems and cybersecurity defenses. Using fraud protection tools, real-time transaction monitoring, and multilayered authentication helps retailers safeguard customer data and payments and maintain brand trust when it matters most. Six in 10 merchants use tokenization to strengthen payment security, increase authorization rates, and deliver more convenient payment experiences. Tokenization replaces sensitive information like payment card details with a secure digital token that can be used in transactions without exposing the original data.

Simplify the shopping journey: Retailers should highlight deals, make navigation intuitive, and streamline checkout into a single page. A frictionless user interface not only reduces cart abandonment but also increases average order values. Optimizing checkout UX alone can lift conversion rates by 35.2% on average for major e-commerce sites. This year, mobile phones are expected to drive 77% of all e-commerce site visits, surpassing traffic from desktops and tablets. This ensures mobile responsiveness and accessibility across devices nonnegotiable in a mobile-first world.

Implement AI-powered inventory tracking: Fluctuating demand and returns during the holiday season can complicate warehouse operations, leaving businesses with more inventory than they can reasonably store or too little when demand is high. Real-time visibility on stock levels prevents overselling and ensures timely replenishment. AI-powered platforms can forecast demand more accurately, helping retailers balance supply and avoid customer disappointment due to stockouts.

Offer 24/7 customer support and chat automation: Research reveals that nine out of 10 retail employees reported feeling exhausted after tough customer exchanges during the holidays. Retailers should deploy AI chatbots to handle common queries as this can drastically reduce response times, freeing up human agents to address complex issues. This round-the-clock availability can enhance customer satisfaction and retention during high-volume periods. One of Salesforce’s holiday predictions is that AI customer agents are set to elevate retail employee experience, by suggesting products, answering detailed questions, and guiding people through their shopping journey. Retailers yet to adopt this technology should consider doing so to better support employees during the demanding holiday season and help them work more efficiently. As per Infosys’ AI Business Value research, customer service is the top use-case category for retail companies, followed by marketing, sales and revenue, and IT, operations, and facilities.

Personalize promotions and communications: According to Epsilon research, 42% of shoppers during the 2024 holiday season planned to purchase online and pick up their orders in-store. Retailers should optimize pricing and promotions to capture consumer spend early and maintain steady purchase frequency through the season, while carefully balancing revenue growth with margin protection.

Retailers should leverage customer data to understand customer preferences, tailor recommendations, send targeted emails, and personalize offers. Personalized engagement fosters loyalty and encourages repeat purchases. Looking back at past holiday marketing efforts can surface important learnings. Examining metrics such as engagement and conversions using AI, identifying where campaigns performed well or fell short, and understanding which promotions drove the most sales can guide future planning.

Integrating buy now, pay later options or flexible pick-up services, such as curbside or in-store collection, further enhances convenience and conversion rates.

Monitor and optimize continuously: Retailers should use analytics tools to track user behavior, site performance, and campaign ROI in real time. This enables teams to make quick adjustments whether reallocating ad budgets, reprioritizing inventory, or refining messaging to capture demand and sustain performance throughout the season. Infosys research found that most retail marketers have implemented AI in five or more of the seven marketing activities that we surveyed, including managing ad spending, campaign planning and deployment, and content creation.

Excel in the last mile: During the holidays, retailers face higher order volumes, increased returns, and persistent staff shortages. Last holiday season, shoppers globally sent back 28% more merchandise worldwide than they did the year before. Retailers must ensure seamless and efficient last-mile operations, as customers eagerly anticipate their orders or return pickups. By leveraging AI to analyze GPS, traffic, weather, and other real-time data, they can dynamically optimize routes, allocate fleets more effectively, minimize empty runs, and enhance delivery speed and reliability, ultimately driving higher customer satisfaction.

Drive year-round growth

By combining these strategies, retailers can build an e-commerce ecosystem that not only thrives during the holiday peak but also sets the foundation for sustained digital growth year-round. That said, beyond enhancing e-commerce operations, retailers should also capitalize on the revival of malls and in-store shopping by strengthening their overall omnichannel strategies to drive success.