Salesforce Q1 2022 Buy Index

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.

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. Global purchasing spend decreased by 3% year-on-year, purchasing traffic by 2% and the number of orders by 12%. However, for the rest of the year, customer confidence and online spending are expected to stabilize. The declines particularly affect Europe. Here, consumers are grappling not only with rising fuel prices, but also with war. Online sales fell by 13% in Europe 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 any friction between physical and digital channels. This will allow them 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 suitcases continued to rise. Consumers, on the other hand, were buying fewer and fewer appliances, cosmetics, sporting goods and electronics. The largest inventory declines were recorded for products such as toys and educational products (-23) and home appliances (-12%).
  • Flexible payment options, such as Buy Now Pay Later (BNPL), keep consumers safe during these uncertain times. In the first quarter of 2022, 9% of digital purchases worldwide were made using this method. This means an increase of 20% year on year and 9% compared to the fourth quarter of 2021.
  • Digital engagement remains very high. The two-year online sales growth rate in the first quarter was 65% globally.
  • Rapidly escalating fuel prices, growing commodity shortages and the continued rise in inflation are affecting the shopping habits of consumers around the world. This could soon lead to major changes in the consumer confidence index and reduce discretionary buying 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 protracted tensions 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. This means an increase of 20% year on year and 9% compared to the fourth quarter of 2021.
    ◦ In Britain, BNPL purchases accounted for 12% of consumer spending, up 37% from a year ago.
    ◦ Germany, Belgium, Australia, New Zealand and the Netherlands recorded the highest growth rates of BNPL purchases there in the first quarter of 2022. Meanwhile, France, Italy , Spain and Canada – the largest year-over-year increase.

A broader perspective

The shopping habits of consumers around the world are influenced by:

  • increase the price of fuel,
  • increasing shortage of goods,
  • continued rise in inflation.

This could soon lead to big changes in the consumer optimism index. It may also reduce discretionary buying 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 picture of shopping by analyzing the activity of over one billion shoppers in more than 61 countries. The Commerce Cloud platform is used for its preparation. Several factors are then applied to extrapolate the forecast and actual results to the entire retail industry.

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