The latest Shopping Index from Salesforce shows very small growth YoY. Are shoppers holding back?
Growth in digital commerce was vanishingly small in the first quarter of 2024 according to the latest Shopping Index report from Salesforce. Recall that online shopping broke records in Q4, 2023.
Digital traffic grew 1% YoY, digital commerce 2%. Digital orders by PC fell sharply, down 9%, while orders by mobile grew 5%. Average order value dropped slightly while average discount rate stayed the same (18%).
Salesforce’s takeaway. Shoppers were holding back during Q1 having spent during the holidays; they’re waiting for big online shopping events later in the year. Inflation remains sticky and events like the Francis Scott Key bridge collapse in Maryland can only have a negative effect on the supply chain.
The retail data shows that consumers have tightened the purse strings, as they did for most of 2023. While global online sales grew modestly, they also slowed down (to 2% year over year) compared to the final quarter of last year. Lagging order volumes and increased prices drove these results.
And while U.S. sales moved out of the red from the fourth quarter last year to 0%, they remain well below the 4% growth we saw in the first quarter of 2023.
Why we care. This looks like a seasonal effect. What big shopping moments are there in January and February? Unless it’s not. If 2024 continued the Q1 trends, it would reflect a dramatic slowing in ecommerce growth. But right now, Salesforce’s diagnosis is plausible.
What should brands do? Salesforce advises balancing advance planning (especially discounts) for those big shopping days further down the road against investment in the kind of engagement — e.g. loyalty programs — that will draw customers in during the quiet times.
The shopping index can be found here.
The post Digital commerce gets off to a slow start in Q1 appeared first on MarTech.
About the author
Kim Davis is currently editor at large at MarTech. Born in London, but a New Yorker for almost three decades, Kim started covering enterprise software ten years ago. His experience encompasses SaaS for the enterprise, digital- ad data-driven urban planning, and applications of SaaS, digital technology, and data in the marketing space. He first wrote about marketing technology as editor of Haymarket’s The Hub, a dedicated marketing tech website, which subsequently became a channel on the established direct marketing brand DMN. Kim joined DMN proper in 2016, as a senior editor, becoming Executive Editor, then Editor-in-Chief a position he held until January 2020. Shortly thereafter he joined Third Door Media as Editorial Director at MarTech.
Kim was Associate Editor at a New York Times hyper-local news site, The Local: East Village, and has previously worked as an editor of an academic publication, and as a music journalist. He has written hundreds of New York restaurant reviews for a personal blog, and has been an occasional guest contributor to Eater.
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