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Salesforce: Deals push post-Cyber Week US ecommerce sales up 8%

Deals are still dominating consumer decisionmaking. BOPIS and returns are expected to surge in the final week.

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After a record-setting Cyber Week kickoff, ecommerce sales continued to grow over the first few holiday shopping weeks of December despite the economic anxiety, according to Salesforce. But the end of the season could bring new challenges as returns flood in.

Based on the activity of over 1.5 billion shoppers, Salesforce released the following data for the three weeks after Cyber Monday (Nov. 29-Dec. 19):

US online sales grew 8% year-over-year, with $97 billion in online orders placed.

Global ecommerce sales grew 2%, accounting for $395 billion in holiday spending.

US sales are setting the pace. Since Nov. 1, US digital sales are up 5% year-over-year, totaling $245 billion. Meanwhile, global sales are flat at $1.03 trillion. This comes as online sales in Europe are down due to more acute inflationary and geopolitical challenges.

Top categories included active footwear (up 40% year-over-year), active apparel (+22%) and general footwear (+19% YoY).

Social referral traffic grew 23% year-over-year globally in the first three weeks of December, and represented 12% of all mobile traffic. In the US, social traffic was up 28% annually.

Taken together, it’s an indication that the pace of spending has kept up into December.

“After a surprisingly strong Cyber Week in the U.S., retailers are continuing to offer attractive online discounts in the final few weeks of the holiday to clear balance sheets and shelf space,” said Rob Garf, VP and GM of retail at Salesforce, in a statement.

Those discounts have been a hallmark of this holiday season, as shoppers seek to find savings at a time of four-decade-high inflation. According to an analysis of more than one million products from dynamic content creation platform FindMine, revenue from products on sale jumped 26% from Monday to Friday during Cyber Week.

Overall, shoppers are going for the deepest discounts this year, even as retailers aren't increasing the percentage of products on sale. For retailers, a common tactic is to introduce site-wide discounts, which change the items that are on sale daily. This means consumers can return to find new deals, but often it doesn't change the more challenging margin equation for retailers.

“Consumers are increasingly choosing sale products over full-price ones, where their dollars go further for having stacked a discount," said FindMine CEO Michelle Bacharach. "For retailers, it's a delicate balance to try and clear excess inventories that have been clogging balance sheets while also protecting margins and maximizing profits.”

While it's a promotional environment, there are still opportunities to gain. Nike executives said strong holiday season results so far were in part powered by 34% year-over-year digital growth in its most recent quarter. The brand is seeing full-price sales in footwear, providing a measure of confidence about maintaining profit margins.

"In North America, our Black Friday and Cyber Week performance set record highs for demand and traffic, fueling strong double-digit revenue growth and exceeding our plan," CFO Matthew Friend told analysts on Tuesday.

What to watch in the final days

The days of the holiday season are ticking down. But with the 2022 calendar gifting last-minute types a full shopping week, there is still expected to be a late surge of activity in the final days, and even after Christmas. Here are a couple of areas of ecommerce where Salesforce is expecting increased activity in the finale:

BOPIS, or Buy Online Pickup in Store, is expected to surge in the week leading up to Christmas, especially as the windows for delivery begin to close. Already, nearly one out of five global orders placed have done so using this hybrid fulfillment method. In the two weeks after Cyber Week, BOPIS was at a 19% share, but ticked up again last weekend. By Saturday, Dec. 17, it accounted for 25% of all orders.

Returns are expected to turn into a "tsunami" in the final weeks, as they are increasing significantly this holiday season. After seeing return rates nearly double in the week after Cyber Week and remaining high, Salesforce is projecting that 13% of orders will be returned, meaning 1.4 billion products will be sent back. That would be an increase of 57% year-over-year. Careful consumers are using returns more frequently in a highly promotional environment, Salesforce said. In one of the observed behaviors, consumers are returning items that they bought earlier in the season after finding a better deal.

Looking for tips on managing returns? Check out a Q&A with the experts at Loop.

NPD: Overall retail lags

When it comes to retail as a whole, The NPD Group found that the first two weeks of December were running behind 2021 totals. Retailer point of sale data collected by the group showed the following:

During Cyber Week, NPD found that discretionary general merchandise sales revenue fell over 2 percentage points.

From Dec. 4-11, sales fell 5%.

Through Dec. 10, fourth quarter sales revenue at retailers was down 6% from 2021, and unit sales were down 10%.

“The traditional feeling of spirited chaos is missing from retail this holiday season, and not in a good way,” said Marshal Cohen, chief retail industry advisor for NPD, in a statement. Cohen added that “momentum and the urgency to shop is still missing, as the consumer’s need to prioritize higher-priced food is impeding discretionary spending.”

This data came before Super Saturday, which is the last Saturday before the holidays begin and typically the largest shopping day outside of the Turkey 5. While retailers are expecting a strong finish to holiday shopping, Cohen said consumers have become accustomed to seeing deals since October, so deep discounts will be necessary to make sales.

On Super Saturday, Sensormatic reported that traffic at brick-and-mortar stores was up 0.2% when compared with 2021. Compared with other Saturdays in the month, traffic was up 36% over Dec. 3 and 17% over Dec. 10, respectively.

The retail technology expects more high traffic days to come. Due to the calendar extending the final shopping week, Sensormatic believes Dec. 23 will have the second-most traffic of the season behind Black Friday, while Dec. 21 and 22 will also be in the top 10. For brands and retailers, the final push is on.

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