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04/16/2020

Salesforce: Q1 digital sales surge as brick-and-mortar cools

Dan Berthiaume
Senior Editor, Technology
Dan Berthiaume profile picture
globe on keyboard surrounded by packages

Strong Q1 growth in e-commerce demand may be a sign of things to come.

The Salesforce Q1 Shopping Index, powered by Commerce Cloud, analyzes data from the activity of more than 1 billion global shoppers and shows a dramatic shift from physical to digital browsing and buying during the quarter. COVID-19 dramatically spread to many parts of the world and was declared a global pandemic in Q1.

According to the index, the number of unique global digital shoppers rose 40% year-over-year (YoY). Digital commerce highlights for Q1 2020 compared to Q1 2019 include 20% revenue growth (compared to 12% growth in Q1 2019), 16% digital traffic growth, and 4% shopper spend growth (reflecting average amount spent by shoppers per visit).

Between March 10-20, spending on essential goods via digital channels surged by 200% and remained elevated for the quarter. In addition to essential products, digital spending in some discretionary categories grew significantly in Q1. For example, home goods experienced an unprecedented 51% YoY increase, active apparel saw a 31% YoY spike, and toys and games had 34% growth YoY.

While the first quarter started fairly consistent with Salesforce Shopping Index data from prior years, with digital traffic and sales evening out after the holidays, things changed once the virus began to spread. In particular, there was a 41% spike in digital revenue during the final 15 days of the quarter. 

Looking ahead, Salesforce says early data suggests a significant shift in consumer behavior across demographics and categories is beginning to take hold. As the demand for essential goods begins to level off and supply chains begin to stabilize, Salesforce predicts gardening and home improvement suppliers, craft stores, toys and learning, and athleisure companies will likely all see surges in April. 

Other predictions include that spending through digital channels will continue to soar, especially as older generations acclimate to digital shopping. Based on previous observations that consumers tend to maintain new shopping behaviors they adopt during the holiday season (such as increases in mobile and social buying and BOPIS purchases), Salesforce expects that once the pandemic is over, global consumers will continue to shop in a more digitally-focused “new normal.”