Digital Sales Had A Banner 2021 Holiday Season Despite It All
Digital sales resisted numerous headwinds this holiday season, such as the pandemic, inflation and the supply chain crisis, to turn in record numbers last year. Software and service provider Salesforce analyzed shopping data from more than one billion shoppers on its customer relationship management platform for its 2021 Holiday Shopping Report, and found that during the 2021 holiday season, consumers spent $1.14 trillion online globally and $257 billion in the U.S., compared to $1.1 trillion and $236 billion in 2020.
Salesforce’s data revealed how shoppers’ adjusted their behavior in response to various challenges. The research found that shoppers, interested in avoiding the retail rush, shipping delays and inventory issues, completed 30 percent of global holiday sales by November 22. Cyber Week accounted for 23 percent of global sales, down from 24 percent in 2020. As concerns grew around new COVID-19 variants, 23 percent of global digital sales were placed between December 18 and December 31. Stores that offered curbside or in-store pickup options over the same time period captured 62 percent of these final global sales.
Digital-first consumers also embraced flexible payment methods. With high holiday prices and discounts in the U.S. down 10 percent year-over-year (YoY), overall use of Buy Now, Pay Later (BNPL) services in the U.S. during the holiday season increased 40 percent compared to 2020. Consumers turned to these offerings throughout the holiday season to offset the higher price tags. Alternative payment forms, including PayPal, Apple Pay and Google Pay, also increased by 15 percent YoY in the U.S.
Luxury handbags and home furniture were the fastest-growing categories online as consumers shifted their spending from needs to wants this holiday season. Luxury handbags registered YoY global growth of 45 percent in online sales. Home furniture and general footwear trailed closely behind at 34 percent and 32 percent growth, respectively.
Social commerce is expected to continue to influence consumer buying behavior. A survey of 1,600 global shoppers from Salesforce's fourth edition of the Connected Shoppers Report found that by 2023, 25 percent of shopping is projected to happen beyond a retailer or brand's website, app or physical store. Over the 2021 holiday season, four of global digital sales on a mobile device were made through a social media app and 10 percent of mobile traffic originated from consumers browsing through social networks.
Despite the shift towards digital, Salesforce found that stores continued to play a critical role over the holiday. Its data reveals that 60 percent of global digital sales were influenced by brick-and-mortar—from generating demand to fulfilling it.
"Despite the lingering pandemic and countless obstacles such as supply chain logistics, low inventory and fewer discounts, consumers flocked online to close out this holiday shopping season with a bang," says Rob Garf, vice president and general manager of retail at Salesforce. "As we move into a new year, retailers must push their brands to platforms such as social, gaming, messaging, and the metaverse to engage shoppers where they are discovering and buying products. They must also double down on efforts to reimagine physical stores to support continually changing digital experiences."