Retailers are seeing increasing signs of recovery following the pandemic as e-commerce (opens in new tab) revenues soar, despite the fear of rising prices in many markets and a 2% drop in digital revenues year on year in the US.
Data from the Salesforce Q2 Shopping Index data indicates rising prices for goods could be a stalling factor, as the US Labor Department Consumer Price Index shows an increase of 5.4% year on year across consumer categories.
However, year on year growth of digital commerce (opens in new tab) revenues has still shown growth of 3% globally, indicating an upward trend as shoppers raise spending on retail goods.
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The boost for e-commerce outlets (opens in new tab) is being supported by physical store reopenings according to the Salesforce report, but recovery is being driven overall by the convenience offered to customers who’ve moved towards buying online (opens in new tab). Many who made the switch from bricks and mortar outlets to e-commerce stores (opens in new tab) during lockdowns have remained as digital customers.
Retailers who are keen to restore customer footfall to their stores will, according to the Salesforce report, need to improve in several areas in order to get things back to where they were pre-pandemic. The Salesforce data highlights areas that can be improved, with the focus being on creating more personalized online shopping (opens in new tab) experiences for consumers. However, improving store associate’s roles and tackling increasing challenges in the supply chain area are also seen as being vital to boost the retail recovery picture.
One area that shows very obvious growth is that of Buy Now, Pay Later (opens in new tab) payment options, which allow customers to spread the cost of goods in a way that suits their budget. This segment of the digital payments (opens in new tab) marketplace saw growth of 86% year on year according to the figures from Salesforce. The figure accounts for 6.03% of all payment methods in Q2 of 2021. That marks an increase of 3.25% of all payments in Q2 of 2020.
The Salesforce study also offers up a valuable insight on which product categories are doing better than others for the Q2 period. Year on year growth has been most buoyant in the luxury apparel sector at 43%, general handbags and luggage at 22% and luxury handbags at 17%. It’s not all good news though, with Q2 year on year decreases seen in the beauty/hair sector at -36%, food and beverage at -21% and beauty/makeup at -19%.
“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,” said Rob Garf, VP and GM, Retail, Salesforce.
“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 labor shortages.”
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