Retail 2021 - the last word from Adobe and Salesforce

Profile picture for user slauchlan By Stuart Lauchlan January 14, 2022 Audio mode
Summary:
Adobe and Salesforce's ongoing tracking of the retail sector provides insight into how the Holiday season rolled out in practice in 2021.

e-commerce

With the Holidays behind us for another year, how did omni-channel retail perform in the end?  Prior to the season, various predictions - often dire and dire-er - were issued from various analysts and vendors as to the impact that the pandemic, the global supply chain crisis and just the ongoing malaise in retail would have on the sector.

At diginomica, we previously looked at what Adobe and Salesforce had to say on the subject, particularly prior to and over the Black Friday/Cyber Monday weekend - a weekend that now effectively reaches back into the dying days of October! So it seems appropriate to take a look at their final conclusions on the 2021 landscape.

Adobe’s take

Adobe’s numbers/conclusions are based on analysis of, it says, “over one trillion visits to US retail sites, 100 million SKUs, and 18 product categories — more than any other technology company or research organization”. That analysis finds that US consumers spent $204.5 billion over the 2021 holiday season, up 8.6% year-on-year. As noted, Black Friday and Cyber Monday impact now extends backwards and forwards outside of the traditional calendar boundaries, the weeks. That was reflected in the weeks before Thanksgiving, starting 1 November, having a growth rate of 19.25% year-on-year.

The downside, as we noted at the time, was that Cyber Week itself was actually down 1.4%, with consumers no longer expecting or waiting for ‘big ticket’ deals over that limited period. That was a good bet to take - discounting across the Holiday season were not as eye-catching as they have been in previous times. Across major categories tracked by Adobe, the research found that discount levels weren’t as great:

  • Electronics 8% compared to 21% in 2020
  • Computers 10% compared to 22%.
  • Appliances 4% vs 14%.
  • Sporting Goods 6% vs 14%.

Only apparel -13% vs 11%) - and toys -19% vs -14% - reported better than previous year discounting.   

On a more upbeat note, consumers were ready to spend more across more days. In 2021, 38 days saw a daily spend north of $3 billion, compared to 25 days in 2020. But that, of course, depended on there being items on the shelves, physical and virtual, to buy. As expected the supply chain crisis did hit home with over 6 billion out-of-stock messages online over the Holiday season, up a massive 253% over the 2019 pre-COVID season and 10% up on 2020.  

As noted across the whole of 2021, fulfilment was a critical competitive differentiator with curbside or in-store pick-up used to complete nearly a quarter (25%) of online orders over the Holiday season as a whole, peaking on 23rd December - Christmas Eve Eve - at 40%.

Some 43% of online sales came via smartphones - $88 billion overall - but consumers still use desktop and laptop computers as their primary way to shop online. That said, there were 6 days where over 50% of sales came via smartphones - 25 November (Thanksgiving), 18 December (Super Saturday), 19 December, 24 December(Christmas Eve), 25 December (Christmas Day), and 26 December. By comparison, in 2020, only Christmas Day exceeded 50%.  

Salesforce’s take

Salesforce’s General Manager for Retail, Rob Garf, told me back on October that Christmas wasn’t cancelled in 2021, despite some downbeat predictions. He was correct.

Salesforce’s assessment of the Holiday spend takes in global numbers as opposed to Adobe’s purely US figures. As such, its analysis is headlined by the eye-popping total of $1.4 trillion of digital spend over the season, up from $1.1 trillion in 2020. For the US alone, consumers spent $257 billion, against $236 billion in 2020.

In common with the Adobe conclusions, Salesforce also picks out the trend for shoppers to get started early and not wait for the Cyber Week bargains. Some 30% of global holiday sales were completed before Thanksgiving with Cyber Week itself accounting for 23% of global sales, down one percent year-on year.

But as well as shopping early for Christmas, consumers also had a last minute splurge as the emergence of new COVID variants saw 23% of global digital sales placed after 18 December. It was stores that were able to offer curbside and safe in-store pickup that won on this front, capturing 62% of the last minute Holiday rush. Overall, stores played a critical role this holiday, according to Salesforce’s data, suggested that 60% of global digital sales were influenced by brick-and-mortar, from generating through to fulfilling demand.

Another finding of note from the Salesforce analysis is the growth in digital-first consumers use of flexible payment methods. In the US alone, use of Buy Now, Pay Later (BNPL) services increased 40% year-on-year. With discounting not as aggressive as the previous year and inflation resulting in higher price tags overall, 2021 shoppers lent towards putting their purchases ‘on the tick’. Given that inflationary pressures and the supply chain crisis aren’t going away any time soon, it’s tempting to wonder how sustainable this is over the long term or whether digital consumers are building up a generation in debt?

My take

Based on those analyses, things turned out pretty much as predicted. As we push into 2022, many of the same pressures remain on the retail sector. The supply chain crisis is going to keep on hurting and the inflationary situation in large parts of the world isn’t going to help anyone. Disruption will continue to be seen and the ‘death of the High Street/Shopping Mall’ headlines will never be far from the mainstream media’s headline decks. There will be plenty to talk about in omni-channel retail in 2022. And for diginomica's own assessment of retail in 2021, check out our review here