Digital Revenue Spikes 20% While Customers Stay Home
- Salesforce Commerce Cloud
It’s the news that we had all expected: following the release of Salesforce’s Q1 Shopping Index, we now know that digital sales have grown by 20% — with the effects of the COVID-19 pandemic and with one-third of the world’s population under some kind of lockdown likely to have heavily contributed. This specific spike is down to what Salesforce is calling “shelter-in-place” orders.
Salesforce’s Shopping Index is an analysis of over 1 billion shoppers around the world, but with a sharper focus on the key markets of the US, Canada, the UK, Germany, France, Australia, as well as a few other countries.
As we attempt to adjust to a new normal — however temporary it may be, or perhaps the old normal is gone forever, such is the current situation today — businesses have been forced to adapt accordingly, changing the way they operate. Of course, this is not only limited to business but all spheres of society, including national governments and international organizations.
We have seen the swift closure of brick-and-mortar stores across the globe as country after country closes its borders and enforces varying levels of local and national lockdowns. And with people either working from home or being furloughed, customers have also had to get used to engaging with brands in a digital-only space.
Retailers that have put most of their focus on physical stores and neglected the digital space are either shutting up shop or adapting as fast as they can to move into ecommerce. The budget food supermarket Aldi has recently launched its first online shopping service in the UK, in response to the pandemic, in which consumers are able to order a box of 22 essential items that will be delivered to their doorstep. And they sold out in minutes during the morning of their launch.
Elsewhere, we have seen companies retool their operations to adapt to the sympathies and worries of customers: providing safer delivery methods like contact-free pick-ups; expanding customer service online; keeping customers up-to-date regarding how the brand is reacting; and what they are doing to help during this time.
The holiday season of 2019 saw strong figures for shopping and ecommerce, yet Q1 for 2020 outpaced the end of last year: revenue growth of 20% compared to 12% in Q1 for 2019; a 16% spike in digital traffic; and a 4% increase in the average amount that is spent per shopper.
But the industry knows that limited booms in digital sales can only pave the massive cracks in the loss of physical store sales. But confined to only the digital space, most retailers are intensely focussed on improving and forging good — or better — online customer experiences.
In the 20 days between March 10 and March 20, spending on essential goods coming from digital channels shot up 200% as customers acknowledged the necessity to stay home. Brands have reacted with better online experiences and deep discounts that are also driving the increase in sales. The high demand for some of these essentials have even forced many retailers to limit the number of purchases per customer — we have all seen GIFs galore connected to toilet paper.
Beyond the essentials, other types of goods have seen increases in sales. Home goods have risen by 51% year-on-year; active clothing by 31%; and games and toys by 34% — supposedly to keep those kids happy (and/or pacified!).
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