Advertisement
09/16/2022

Salesforce: Inflation will curb online holiday sales growth

Dan Berthiaume
Senior Editor, Technology
Dan Berthiaume profile picture
Image
Salesforce Shopping Index
The Salesforce Shopping Index predicts ho-hum online holiday sales.

Scrooge may pay a visit to online retailers this holiday season – in the form of rising retailer costs and increased consumer prices.

Online sales will remain essentially flat year-over-year for the 2022 holiday season, according to the Salesforce Shopping Index, which analyzes global data from more than one billion consumers. November and December 2022 sales are expected to reach $1.12 trillion worldwide and $265 billion in the U.S. 

These figures are essentially flat compared to 2021, when Salesforce reported that online holiday sales across November and December rose 5% year-over-year worldwide to $1.14 trillion and 9% in the U.S. to $257 billion.

The study also warned that increasing costs for suppliers, labor and transportation will outpace retailers’ ability to pass costs onto customers, putting 10% of profits at risk for retailers and brands.

Salesforce forecasts the following for this holiday season:

  • Digital sales will continue to dwarf pre-pandemic levels, up 55% globally and 61% in the U.S. at a three-year growth rate compared to 2019 sales). However, digital sales will remain essentially flat compared to 2021 – decreasing 2% globally and increasing 3% in the U.S.
  • Inflation will tamp down consumer spending worldwide. As global online prices grow 7% compared to 2021 – and 15% compared to 2020 – consumers’ total online orders will drop 7% compared to the 2021 holiday season (5% fewer in the U.S.).
  • Inflationary pressure will drive more than four in 10 surveyed shoppers (42%) to start holiday shopping earlier than ever this year. Salesforce predicts 29% of holiday sales will occur in the first three weeks of November. That’s a 5% increase compared to 2021. 
  • Six out of 10 surveyed consumers say they will look for sustainable products and shipping options this holiday season. However, fewer than one in four brands and retailers (23%) will promote and offer sustainable products and options throughout the shopping journey. 

 “Retailers are feeling the squeeze from unprecedented margin pressure due to increased labor wages, fuel prices, and inventory carry costs,” said Rob Garf, VP and GM of Retail, Salesforce. “Retailers mustn’t let margin be the Grinch that steals the holiday. It’s critical to contain costs by automating and scaling operations – particularly by streamlining processes and removing friction as consumers increasingly shop across digital and physical touchpoints.”

Deloitte has more holiday spirit
Deloitte recently presented a more optimistic holiday e-commerce forecast. According to Deloitte predictions, there will be a 12.8% to 14.3% increase in 2022 holiday e-commerce sales compared with the same period in 2021. Deloitte expects consumers going online to hunt for deals in the face of continuing inflation to be a major driver of this growth.

Utilizing its Commerce Cloud platform, Salesforce analyzed aggregated data to produce holiday insights from the activity of more than one billion global shoppers across more than 61 countries, with a focus on 12 key markets: the U.S., Canada, U.K., Germany, France, Italy, Spain, Japan, the Netherlands, Australia/New Zealand, the Asia-Pacific (excluding Japan, Australia, and New Zealand), and the Nordics.