Wednesday 22 September 2021

Rob Garf

Global digital commerce revenue grows just 3% in Q2

DUBAI, July 26, 2021

Global year over year (YoY) digital commerce revenue grew by a modest three percent in the second quarter of this year after posting four consecutive quarters of growth greater than 50%, according to the Q2 Salesforce Shopping Index. 
US digital revenue fell by 2% YoY.
What’s the impact: Despite less purchasing power this quarter, it’s clear that consumers haven’t been deterred from shopping online. After a huge surge in online shopping that occurred in Q2 ’20, consumers have remained online and continued to grow online revenue for retailers. 
As retailers begin to prepare for back-to-school and holiday shopping, Salesforce’s data indicates that retailers will need to focus on building personalised online shopping experiences, evolving store associates’ roles, and managing challenges around the supply chain and price inflation to help drive growth. 
Salesforce Retail VP and GM Rob Garf said: “While year-over-year growth in digital commerce essentially flatlined this quarter, it’s clear that the online habits consumers formed over the last year are here to stay.”
“As we approach the holiday season, consumers should expect smaller discounts and increased prices at checkout as retailers continue to feel margin pressure from manufacturing challenges, supply chain delays, and labour shortages," Garf added.
While the US Labour Department consumer-price index cites an increase of 5.4% YoY across consumer categories, Salesforce’s Shopping Index indicates that inflation is hitting the retail sector harder, with Average Selling Price (ASP) in Q2 rising 11% YoY.
The Shopping Index also shows that Average Order Values (AOV) this quarter were up to $90.64 compared to $77.96 in Q2 2020, an increase of 17%, even as the number of units purchased by consumers decreased by 1%. 
Average discount rates dropped to 17% this quarter compared to 20% in Q2 2020 as limited inventory and sustained consumer demand limited markdowns. 
Buy Now, Pay Later payment options grew 86% YoY to account for 6.03% of all payment methods in Q2 ‘21, up from 3.25% of all payments in Q2 ‘20. 
Product categories with the most growth in Q2 YoY include:
Luxury apparel (43%) 
General handbags & luggage (22%)
Luxury handbags (17%)
Product categories with the greatest decrease in Q2 YoY include:
Beauty — hair (-36%)
Food & beverage (-21%)
Beauty — makeup (-19%)
This quarter marks a year since digital commerce sales exploded as consumers sought ways to circumvent pandemic shopping concerns. The initial Q2 2020 surge resulted in an initial 75% YoY growth – from Q2 2019 to Q2 2020.
Positive YoY growth this quarter reflects that the online shopping habits formed by consumers over the course of the pandemic have held up over the last year.-TradeArabia News Service


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