It goes without saying that the last two quarters have been a steep learning curve for everyone. The COVID-19 pandemic has forced businesses to face challenges of a monumental scale - and quickly. For retail, although stores have recently been allowed to re-open, it meant shuttering physical locations and shifting to eCommerce.
The Salesforce Q2 Shopping Index, powered by Commerce Cloud, analyses data from the activity of more than one billion global shoppers. This data, which is analysed on a quarterly basis, shows that digital continues to surge even as stores reopen, and consumer trust in purchasing online is rising. Could it be that the ‘nation of shopkeepers’ is getting used to eCommerce?
Over the last few weeks, it’s been nice weather in the UK and lockdown has begun to ease and perhaps the increase in mobile purchasing and social traffic is a reaction to new opportunities to socialise. Mobile traffic was up 49% (compared to 36% overall) and order growth up 57% on mobile (43% overall).
This is good news for retailers. Initial insights would suggest that consumer confidence with eCommerce is increasing, although it is difficult to predict the long term impact of the COVID-19 pandemic.
In our Q1 Shopping Index round up, we predicted that the increasing adoption and use of digital will continue even as consumers transition through the crisis and stores begin to reopen. This is why so many traditional retailers, digitally native brands, and consumer goods manufacturers are doubling down on digital to provide a seamless experience between virtual and physical shopping journeys. It turned out that this prediction was correct- and more and more shoppers are purchasing online.
The Shopping Index compares traffic and order share by vertical, which last quarter we saw was massively swayed towards home goods and toys. Q2, however, is a different story, with health & beauty and clothing and apparel representing 56% and 54% of the increase in order volume respectively. What this could be a result of is increased discounting: Q1 saw a massive sell-off of merchandise by brands and retailers, which could be as a result of trying to bring in cash flow during economic uncertainty.
It could also be that reeling retailers found their feet with online marketing. With conversion rate up a whole percentage point globally, cart abandonment rate down, and social traffic accounting for a lot of the rise, the pivot from marketing campaigns in-store to online, spinning up campaigns quickly- could be beginning to pay off.
According to the latest data from Springboard published by Retail Week, footfall across all UK shopping destinations rose 10.6% in week four of trading, more than twice the 4.1% increase seen the previous week. While this is a good sign, it’s a slow recovery for the sector. Spurred by the re-opening of restaurants and bars, the high street saw the biggest increase, whereas shopping centres are still largely empty. While this is good news for the safety of the British public, it’s even more important that retailers replace store revenue with eCommerce revenue in the long term, as it is unclear what the lasting impact of the COVID-19 pandemic could be on how we live, work and shop.
The shopping index shows that the UK consumer is gaining confidence in shopping online, particularly on mobile devices and through social media. Savvy retailers could need to make the most of a smaller pool of spenders if there is a lasting economic impact as a result of the COVID-19 pandemic. With cart abandonment down and conversion rate up in Q2, it looks like retailers are making eCommerce the priority.
Data shows the average eCommerce visit is shorter than ever at four minutes and 12 seconds, and with mobile traffic is increasingly beating desktop, retailers must reduce friction and create seamless experiences if they want to grow revenue.
It’s hard to say what’s next for the UK retail sector, and it’s been a tough few months for everyone. However, the shopping index could be providing a beacon of light: customers are getting used to eCommerce, and retail initiatives to improve the experience and pivot their marketing strategies seems to be paying off.
In the current reality, businesses are facing challenges with reopening and building resilience. As a next step, join us for a virtual walk-through in one of the stores of Hans Anders, a Dutch optic retail chain. Angeli Engels, Director Sales, and Bram Bruijns, Director Omnichannel at Hans Anders, will share how they prioritised the reopening of their shops and boost online presence with digital-led activities.
Q2 Shopping Index Methodology
The Q2 Shopping Index uncovers the true shopping story through analysing the activity of more than one billion shoppers across more than 34 countries powered by Commerce Cloud, with a focus on key 10 markets: U.S., Canada, U.K., Germany, France, Spain, Japan, Netherlands, Australia/New Zealand, and the Nordics. This battery of benchmarks provides a deep look into the last nine quarters and the current state of digital commerce. Several factors are applied to extrapolate actuals for the broader retail industry and these results are not indicative of Salesforce performance.