Consumer Spending Is Up as Prices Spike 11% YoY: New Data from Q2 Shopping Index
DUBAI, United Arab Emirates — 26 July 2021 — Global year over year (YoY) digital commerce revenue grew by a modest 3% after posting four consecutive quarters of growth greater than 50%, according to the Q2 Salesforce Shopping Index. U.S. 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 personalized online shopping experiences, evolving store associates’ roles, and managing challenges around the supply chain and price inflation to help drive growth.
The Salesforce perspective: “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.”
- While the U.S. Labor 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%)
Zoom out: 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.
- Find more insights by exploring the interactive Shopping Index dashboard powered by Tableau.
- Check out this blog post on what to expect from the 2021 holiday season.
Photo Caption: Global year over year (YoY) digital commerce revenue grew by a modest 3% after posting four consecutivequarters of growth greater than 50%, according to the Q2 Salesforce Shopping Index