Salesforce expects online holiday purchases to remain slow until Thanksgiving.
A game of “discount chicken” by retailers may be delaying early online holiday purchases.
Early (Oct. 1–Nov. 14) online holiday sales softened compared to the same period in 2021, according to new Salesforce Shopping Index digital commerce data. This occurred even as digital traffic rose 3% in the U.S. and 1% globally year-over-year (YoY) as consumers began searching for holiday gifts.
Salesforce cites consumers holding out for online holiday discounts, which they assume will reach their peak during Cyber Week, as driving this mediocre sales performance. So far, 2022 online holiday sales are meeting Salesforce’s pre-season forecast for flat YoY performance.
Other Salesforce Shopping Index early holiday indicators include:
Average Selling Price (ASP) rose 14% in the U.S. and 8% globally compared to 2020. Even with discounts, Salesforce says consumers are still paying more than they did two years ago.
The highest discounts were found in:
Home appliances (26%).
General, handbags, and luggage (24%)
General, apparel (22%)
Beauty, makeup and beauty, skincare (21%)
Customer service chatbot sessions increased 44% YoY.
Salesforce Cyber Week 2022 predictions
Reviewing early season data, Salesforce expects to see four major trends driving the biggest holiday season shopping rush:
A sluggish start will equate to a bigger-than-expected Cyber Week. Cyber Week is anticipated to have the highest concentration of holiday purchases. While holiday shopping was largely spread out across November over the last several years, this year’s more price-conscious shoppers are now waiting in anticipation of enticing later-season deals.
Discounts will deliver value to consumers and free up retailer inventory and shelf space. Salesforce predicts global average discount rates will likely reach 25% during Cyber Week 2022. This would be a 12% increase compared to 2021, when retailers had stronger demand and inventory scarcity. Salesforce says the biggest jump in discounts during Cyber Week will come in luxury handbags (3X increase), general apparel (2X increase), and skincare and makeup (2X increase).
Buy Online Pickup In Store (BOPIS) will deliver immediate satisfaction from gift purchases. Salesforce data indicates that retailers will see a 1.5x–2x surge in BOPIS and curbside pickup orders placed on Thanksgiving and Black Friday morning.
Chatbot and automated service usage will skyrocket. As companies focus on cutting costs and saving agent time for complex customer service requests during Cyber Week, Salesforce forecasts that chatbot usage will grow at a 43% rate YoY.
“Retailers are once again playing the game of discount chicken, where they execute earlier promotions to drum up demand, only to have consumers wait for that last and biggest deal during Cyber Week,” said Rob Garf, VP and GM of Retail, Salesforce. “Early season online traffic was strong, but online sales were soft. This means while consumers browsed online early in the season, they didn’t necessarily bite on the uninspiring deals. Rather than pulling back on discounts, retailers can find success now by focusing on automation and productivity gains to reduce costs and combat increasing margin pressure.”
The Salesforce Shopping Index examines the previous nine quarters of activity and online shopping statistics of more than 1.5 billion unique global shoppers from more than 64 countries. Several factors are applied to extrapolate macroeconomic figures for the broader retail industry.