New data from Salesforce indicates global digital commerce will grow year-over-year during the 2021 holiday season, with rising costs and decreased inventory.
The 2021 Salesforce Holiday Insights study predicts there will be 7% year-over-year overall growth in global digital commerce for November and December, slowing down from 50% year-over-year growth in 2020 and 10% growth in the U.S. (slowing down from 43% year-over-year growth in 2020).
While Salesforce expects online sales growth to be moderate compared to the 2020 holiday season’s historic 50% surge and more in line with pre-pandemic growth trends, the company still anticipates digital shopping habits formed during the pandemic to persist and drive total sales to record rates for the upcoming holiday season.
Specifically, Salesforce forecasts total digital sales to reach a record high of $1.2 trillion globally and $259 billion in the U.S., with digital commerce growth driven by a 20% rise in consumer prices despite fewer global (-2%) and U.S. (-4%) holiday orders expected.
Salesforce sees several reasons for retailers, suppliers, and consumers to experience increased costs, including the U.S. retail industry facing an extra $223 billion in the cost of goods sold this holiday season due to decreased manufacturing capacity, increased logistics costs, and the labor shortage. And with inventory issues and higher costs fueling inflation and cutting into margins, Salesforce projects consumers will see a 20% rise in prices during the holiday and beyond.
As consumers contend with these higher prices, Salesforce expects global "buy now, pay later'' usage will likely account for 8% ($96 billion globally and $20 billion in the U.S.) of online orders this holiday season, up from 4% of orders during the 2020 holiday season.
[Read more: Study: ‘Buy-now-pay-later’ usage set to explode]
However, Salesforce projects a 94% decrease in packages at risk of being delayed, or 40 million packages worldwide, down from 700 million in 2020. Just five million packages are expected to be at risk of delay in the U.S.
Other findings include:
- Online product catalogs are predicted to shrink by 5% from 2020.
- Consumers are predicted to come out early again this holiday season to avoid out-of-stocks, with pre-Cyber Week shopping growing 6% in the U.S. (to $29 billion) and 3% globally (to $129 billion).
- Salesforce projects 30% growth in e-commerce traffic from social referrals and an 18% rise in email marketing across November and December, compared to the 2020 holiday season.
- More than six in 10 global online orders are predicted to be influenced by brick-and-mortar locations — either by helping to place an online order or by fulfilling it via curbside pickup options.
"While last holiday was defined by the last mile, this year is expected to be dominated by the first mile," said Rob Garf, VP and GM of retail, Salesforce. "With persistent global supply chain disruptions, retailers must draw consumers to their online and physical stores early in the season to fulfill demand and capture holiday spending."
Salesforce analyzes aggregated data to produce holiday insights from the activity of over 1 billion global shoppers across more than 40 countries powered by Commerce Cloud, in addition to Marketing Cloud and Service Cloud data from retailers. Salesforce's overall holiday data set includes 24 out of the top 30 U.S. online retailers on the 2021 Digital Commerce 360 list and utilizes publicly available third-party data sources.