Salesforce: Inflation affects U.S. Q2 online sales

Dollar sales of discretionary general merchandise fell 4% in June.
U.S. online sales went into the red in the second quarter of 2023.

E-commerce sales in the U.S. are displaying a trend not seen in almost 10 years.

For the first time since Salesforce started offering its Shopping Index online sales tracker in 2014, U.S. online sales declined year-over-year during a quarter. Specifically, U.S. online sales dropped 1% in the second quarter of 2023 compared to the same period a year earlier.

According to Salesforce analysis, the drop in sales is likely related to U.S. shoppers facing higher prices for consumer products despite an 11% increase in discount rates. In addition, a 4% year-over-year decrease in online orders, the largest such decline recorded by Salesforce in five quarters, contributed to negative sales growth.

While sales and order volumes were down, Salesforce data reveals average online order values were up 3% year over year to $124.45. And even with the pullback on spending, online traffic grew 2% year-over-year, which Salesforce attributes to consumers looking for deals. 

In addition, the share of online orders coming from repeat shoppers rose 5% year-over-year during the quarter to 39% of all orders. 

Other findings

  • Second-quarter online discount rates increased by 12% compared to the second quarter of 2022 and 19% over the same period in 2021.
  • The send rate of online marketing messages increased 6% in the second quarter of 2023, significantly down from 28% in the second quarter of 2022. The rate of deceleration was greatest for email marketing, which saw growth of only 3% compared to 21% in the same quarter of 2022. Mobile messages carried much of the growth for the quarter, rising 28% year-over-year, according to Salesforce.
  • Despite the deceleration in message sends, the rate of message opens held steady quarter-over-quarter at 21%. Click rates also stayed the same, holding at 0.7%. 

Recommendations for the second half of 2023

Salesforce suggests online retailers should focus promotional efforts on relevant and timely messaging that delivers value to customers, while engaging them on the channels and devices that they prefer. According to Salesforce analysis, 2023 Prime Day results indicate shoppers will be seeking online bargains and waiting until they know they are getting a good deal. 

For the rest of the year, Salesforce advises retailers to focus their retail strategy on promotions, customer engagement, and building relationships with their most loyal shoppers

“Is the economy improving or not?,” Caila Schwartz, director, consumer strategy & insights, Salesforce, said in a corporate blog post. “Should retailers be optimistic or worried? Economic indicators are still pointing every which way and the messages seem to contradict each other daily.. Strong macroeconomic headwinds are still putting downward pressure on consumers worldwide to spend carefully and save more, which could impact retail strategy for the balance of 2023.”

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