Salesforce Q1 2022 Shopping Index Report: Inflation Slows Digital Sales Growth

Salesforce’s Q1 Shopping Index report for the first quarter of 2022 ended, shows global digital sales were down 3% year-over-year. This is the first decline in the report’s nine-year history.

The most important facts
Inflation (in March in the United States, prices increased by an average of 11%), supply chain problems and economic uncertainty have had an impact on consumers’ purchasing power. As a result, online shopping spending fell after several quarters of unprecedented growth. Data released by Salesforce shows that while global shopping spend was down 3% year-on-year, shopping traffic down 2% and order count down 12%, for the rest of the year, confidence customers and online spending should stabilize. The declines are particularly affecting Europe, where consumers are facing not only rising fuel prices, but also war. Internet sales fell by 13% and the number of orders by 17%.

Inflation has finally caught up with rising spending. Consumers are buying less and the number of stores where purchases are made has decreased. This is probably not a temporary shift in sentiment, but a sign of a more serious change in consumer behavior. To adapt to these new conditions, merchants need to eliminate friction between physical and digital channels in order to attract and retain customers. said Rob Garf, Vice President and General Manager of Retail, Salesforce.

Q1 2022 in figures

  • Overall purchasing expenditure decreased by 3% year-on-year. The data shows that there were many reasons for this: shopping traffic fell by 2%, consumer spending by 1%, and the number of orders – by 12%.
  • Under conditions of prolonged tensions and supply chain delays, the number of stock keeping units (SKUs) in Q1 2022 decreased by 3% compared to Q1 2021.
  • Spending on luxury goods, handbags and luggage continued to rise, while consumers bought fewer appliances, cosmetics, sporting goods and electronics. The largest inventory declines were recorded for products such as toys and educational items (-23) and home appliances (-12%).
  • Flexible payment options, such as Buy Now Pay Later (BNPL), keep consumers safe during these uncertain times. In Q1 2022, 9% of global digital purchases were made via this method, an increase of 20% year-on-year and 9% from Q4 2021.
  • Digital engagement remains very high. The two-year online sales growth rate in the first quarter was 65% globally.
  • Rising fuel prices, rising raw material shortages and continued inflation are impacting consumer shopping habits around the world, which could soon lead to significant changes in the consumer confidence index and reduce discretionary purchases for the rest of the year.
  • The global economy continues to feel strained due to disrupted supply chains due to worker lockdowns and the closure of the Port of Shanghai.
    ◦ Under conditions of prolonged stress and supply chain delays, the number of stocking unit SKUs in Q1 2022 decreased by 3% compared to Q1 2021.
  • The largest declines in inventory levels were recorded for product categories such as:
    – toys and educational items (-23%)
    * Household appliances (-12%)
  • Flexible payment options such as BNPL:
    ◦ 9% of global digital purchases in Q1 2022 were purchased by BNPL, signifying an increase of 20% YoY and 9% from Q4 2021
    ◦ in the UK, BNPL purchases represent 12% of consumer spending, 37% more than a year ago
    ◦ Germany, Belgium, Australia, New Zealand and the Netherlands recorded the highest growth rates of BNPL purchases in the first quarter of 2022, while France, Italy, Spain and Canada – the largest year-over-year increases.

A broader perspective
Rising fuel prices, rising raw material shortages and continued inflation are impacting consumer shopping habits around the world, which could soon lead to significant changes in the consumer confidence index and reduce discretionary purchases for the rest of the year. This will force merchants to strike a delicate balance between stimulating demand and maximizing margin in promotional schedules.

The full report in English is available at: www.salesforce.com.

About the study
The Q1 Shopping Index paints a true picture of shopping by analyzing the activity of over one billion shoppers in over 61 countries using the Commerce Cloud platform. Several factors are then applied to extrapolate the forecast and actual results to the entire retail industry.

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