Digital spending has declined globally by 3% YoY, according to the Q1
Shopping Index from Salesforce.
In addition, traffic was down by 2% and order volumes by 12%.
But Salesforce projects that consumer confidence and online
spending will level off for the rest of the year.
Meanwhile, inventory availability fell by 3% versus the first quarter of 2021. The greatest decreases were seen in Toys and Learning
(-23) and Appliances (-12%).
However, all this could drive down discretionary spending and push retailers to offer heavy discounts or flexible payment options, Forrester says.
“Inflation has finally caught up to bullish spending, with consumers buying fewer items from fewer retailers,” says Rob Garf, vice president and general manager of retail
at Salesforce. “This likely isn’t a temporary mindset, but rather a preview of a behavioral shift in which retailers must remove friction between physical and digital channels to
attract and retain loyal shoppers.”
Garf adds: “Rising inflation, spikes in fuel prices, and continued merchandise scarcity are commingling to impact consumer spending habits. As a
result, we’ll likely see a continued rise in the use of flexible payment options, such as Buy Now Pay Later, acting as a safety net for consumers to make purchases instantly and pay them off
over time.”