COVID-19 has led to a boom in digital shopping as many consumers find themselves trapped at home. Combined with earlier holiday shopping, this trend will lead to a mess in which packages are delayed and shoppers are more driven by shopping than by brand loyalty, according to a forecast from Salesforce.
Salesforce projects 30% growth in global digital commerce for holiday year-over-year to $940 billion. In the United States, the increase will total 34% -- to $221 billion.
And digital commerce will comprise 18% of global retail sales and 30% of those in the U.S.
Despite that growth, overall holiday sales are expected to be flat, totaling $5.1 trillion in global sales and $730 billion in the U.S.
In a digital press conference on Wednesday, several developments were outlined by Rob Garf, vice president of Industry Insights for retail and consumer goods, Salesforce:
Fulfillment Concerns Will Overshadow Brand Loyalty
Salesforce protects a”significant surge on the carrier system,” clogging up the area called “the last mile.” Volume will exceed capacity by 5%, leading to a potential delay of 700 million holiday packages.
Potential solutions? For one, retailers can offer such alternative pickup options as buy online, pickup in-store (BOPIS).
“Retailers are pushing closer to the consumer,” Garf says. This means using the stores as fulfillment centers to help customers avoid shipping and handling charges.” Or retailers can partner with the likes of Uber, which presumably has high capacity.
Holiday Demand Will Start Sooner
With Amazon Prime Day hitting in October, this will lead to earlier holiday demand.
This shift is expected to move up to $6 billion of normal Cyber Week volume to October within the U.S., and $26 billion globally. Even so, digital traffic will grow by 28% YoY during Cyber Week itself, fueled by the fact that people will be avoiding stores and shopping on their mobile phones.
Garf urges retailers to send “relevant, empathetic and transparent messages.”
Research shows that 83% of consumers are open to receiving operational updates, a case for triggered email. And don’t neglect social, which should account for 12% to 15% or orders. Instead, marketers should embrace “shopping at the edge — pushing the brand to wherever the consumers are.”
Growth in Online Shopping Means a Spike in Holiday Returns
The digital surge could lead $280 billion worth of returns. And "that doesn’t cover the costs of taking them back in," Graf says.
Retailers can forestall these problems up front with tools like live chat and digital concierge services. In addition, ecommerce websites should provide product reviews, videos and clear descriptions of what to expect. Failing all that, stores can be used for return dropoffs, just as they are for product pickups.
New Consumer Behaviors Will Drive Hot Product Categories
The expected winners this year include home fitness, beauty, toys and games and home furnishings. Last year, the winners were electronics and gaming, footwear, general apparel, luxury apparel and beauty.
Garf concludes that successful retailers will use "everything at their disposal to make shopping easy and safe, including convenient digital ordering, creative and efficient fulfillment, and responsive customer service."