The most wonderful time of the year? How online retail coped over the Holidays, according to Adobe, Salesforce

Stuart Lauchlan Profile picture for user slauchlan January 12, 2023 Audio mode
Summary:
With only 346 days left until Christmas, how did retailers perform in the season just finished?

christmas

With the Holidays season now firmly in the rear view mirror, final analysis is coming in on how 2022 ended for retailers, with both Adobe and Salesforce releasing their conclusions based on actual performance data. 

So, was it the most wonderful time of the year? Well, it wasn’t bad at all, according to Salesforce’s numbers. Although sales in the early part of November were lower than the previous two years - when the COVID boost was still working - discounting and BOPIS (Buy Online, Pick-Up In Store) helped take  online global sales to $114 trillion globally, with $270 billion of that coming from the US. 

Adobe’s numbers, based on over one trillion visits to U.S. retail sites, 100 million SKUs, and 18 product categories, reckons that US consumers spent $211.7 billion, up 3.5% year-on-year.  Some 38 days between 1 November and 31 December saw purchases top $3 billion. Particularly popular this season were toys, up 206% on the pre-Holidays period, as well as video games (115%) and apparel/accessories (94%). 

Discounting played a strong role, as predicted, with Salesforce data indicating an average discount rate of 21%, higher than last year’s 19%. Beauty/skincare/make-up products were where to find the best bargains, with an average discount rate of 29%, followed by general apparel and handbags on 27%.  Adobe also highlighted toys, citing discounts peaking at 34%, as well as  electronics at 25%, computers at 20% and apparel at 19%.  

BOPIS scored highly with consumers with 20% of online orders placed globally using this fulfilment channel, according to Salesforce. For those last minute shoppers, BOPIS proved invaluable with the Friday before Christmas seeing adoption hit 35%. And for those retailers offering a BOPIS option, there was a gift in the shape of revenue growth seven times faster than those which didn’t. 

For its part, Adobe pointed to curbside pick-up as a sub-set, used by 21% of online consumers. While that was actually down two percent on last year, the immediately pre-Christmas days saw curbside fulfilment peak at 42% of online orders. 

Both Adobe and Salesforce found that mobile phones were the dominant platforms used for online shopping. Adobe cited 47% of sales coming via smartphones, up from 43% in 2021, with Christmas Day itself setting a new mobile record by driving 61% of online sales. For Christmas week, Salesforce’s data puts mobile ordering at 68% of total, up on last year’s 65%, and higher than the 64% reported for Cyber Week itself. 

It’s also been a season of increased returns, according to Salesforce, with 1.39 billion of orders sent back to retailers, accounting for 13% of total Holidays season purchases, a hefty 63% increase year-on-year. 

One point of difference between the two sets of data relates to the impact of marketing investments. Adobe cites paid search as the biggest driver of sales for retailers, accounting for 29% of online sales during the season, followed by direct web visits (19%), organic search (17%), affiliates/partners (16%), and email (15%). Revenue directly attributable to social media remained at less than 3% of total sales, although that share  is 24% up year-on-year. 

Salesforce, on the other hand, has social media referrals hitting a new high of 12% of all mobile traffic, up 23% year-on-year. Direct website visits was still the most popular channel on 37%, followed by search. 

My take 

Only 346 days until Christmas. 

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