{"id":58867,"date":"2022-09-15T09:00:00","date_gmt":"2022-09-15T16:00:00","guid":{"rendered":"https:\/\/www.salesforce.com\/?p=58867"},"modified":"2022-09-15T11:55:33","modified_gmt":"2022-09-15T18:55:33","slug":"salesforce-holiday-predictions-2022","status":"publish","type":"post","link":"https:\/\/www.salesforce.com\/news\/stories\/salesforce-holiday-predictions-2022\/","title":{"rendered":"Salesforce Holiday Forecast: Margin Pressures Threaten 10% of Retail Profits"},"content":{"rendered":"\n

Global sales expected to reach $1.12 trillion for 2022 holiday season<\/em><\/p>\n\n\n\n

Data released alongside 2022 <\/em>Holiday Insights Hub<\/em><\/a>; tool features up-to-date shopping data and trends<\/em><\/p>\n\n\n\n

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New Salesforce data released today shows that inflation \u2013 in the form of skyrocketing retailer costs and increased consumer prices \u2013 will play a key role in the 2022 holiday shopping season.  <\/p>\n\n\n\n

According to the Salesforce Shopping Index, which analyzes global data from more than one billion consumers, online sales will remain essentially flat this holiday. November and December sales are expected to reach $1.12 trillion <\/strong>worldwide and $265 billion in the U.S. <\/p>\n\n\n\n

As retailers and suppliers struggle to absorb operating costs, leading to higher prices for consumers, Salesforce forecasts the following for this holiday season:<\/p>\n\n\n\n

Overall online spending will remain strong when compared to pre-pandemic<\/strong><\/p>\n\n\n\n

The surge in online spending seen over the last two years will remain strong in 2022, though relatively unchanged compared to last year<\/a>.<\/p>\n\n\n\n

Digital sales will continue to dwarf pre-pandemic levels (up 55% globally and 61% in the U.S. at a 3-year growth rate compared to 2019 sales). However, they\u2019ll remain essentially flat compared to 2021 \u2013 decreasing 2% globally and increasing 3% in the U.S.<\/p>\n\n\n\n

Increasing prices will mean fewer overall orders<\/strong><\/p>\n\n\n\n

Inflation will tamp down consumer spending worldwide. As global online prices grow 7% compared to 2021 \u2013 and 15% compared to 2020 \u2013 consumers\u2019 total online orders will drop 7% compared to the 2021 holiday season (5% fewer in the U.S.).<\/p>\n\n\n\n

Profit margins will tighten<\/strong><\/p>\n\n\n\n

The increasing costs for suppliers, labor, and transportation will outpace retailers\u2019 ability to pass costs onto customers, putting 10% of profits at risk <\/strong>for retailers and brands, according to the Salesforce analysis. <\/p>\n\n\n\n

Inflation will jumpstart holiday shopping early<\/strong><\/p>\n\n\n\n

Inflationary pressure will drive more than four in 10 shoppers (42%) to kickstart holiday shopping earlier than ever this year. Salesforce predicts 29% of holiday sales will occur in the first three weeks of November<\/strong> \u2013 before Cyber Week even begins. That\u2019s a 5% increase compared to 2021. <\/p>\n\n\n\n

Rumors of an October Prime Day will likely drum up demand and create a halo effect for all retailers, similar to the July event<\/a>. However, it is unlikely to have a material impact on sales distribution across the full holiday season.<\/p>\n\n\n\n

Shoppers will look for sustainable products<\/strong><\/p>\n\n\n\n

The majority of consumers, six out of 10, say they will look for sustainable products and shipping options this holiday season. Despite this strong preference, less than one in four brands and retailers (23%) will promote and offer sustainable options throughout the shopping journey. <\/strong><\/p>\n\n\n\n

The Salesforce perspective: <\/strong>\u201cRetailers are feeling the squeeze from unprecedented margin pressure due to increased labor wages, fuel prices, and inventory carry costs,\u201d said Rob Garf, VP and GM of Retail, Salesforce. \u201cRetailers mustn\u2019t let margin be the Grinch that steals the holiday. It\u2019s critical to contain costs by automating and scaling operations \u2013 particularly by streamlining processes and removing friction as consumers increasingly shop across digital and physical touchpoints.\u201d<\/p>\n\n\n\n

Go deeper: <\/strong><\/p>\n\n\n\n