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    Salesforce: Shoppers are saving their big moments for later in 2024

    Salesforce: Shoppers are saving their big moments for later in 2024
    Salesforce: Shoppers are saving their big moments for later in 2024

    The latest Salesforce Shopping Index data suggests that shoppers are holding onto their purse strings until later in the year — at least, if 2023 is any guide. The consumer caution exhibited in 2022 and 2023 will continue through 2024.

    As far as ecommerce goes, this doesn’t mean it’s not showing YoY growth; it’s just that the growth is very modest so far — just 2% in Q1. That compares with 4% in Q1 2023. Order volume declined by 2%.

    Last year’s price-conscious shopper is still with us

    We sat down with Caila Schwartz, director of consumer insights and strategy for retail and consumer goods at Salesforce, to get a deeper perspective on the stats.

    “We’re seeing a lot of trends precipitate from last year,” she said, “which is mainly this price-conscious shopper. Especially around the latter half of 2023, we saw shoppers wait until holiday season to make bigger purchases and a lot of sales getting concentrated into Cyber Week.”

    Retailers are still seeing good digital traffic. “People are coming and browsing,” said Schwartz. “Where we’re seeing a pullback is in order volumes.”

    But surely these trends are a direct result of the success of big sales events like Prime Day and Cyber Week? No wonder consumers are keeping their wallets shut in the first half of the year.

    “Q4 is the biggest time of the year for retail,” she agreed. “What’s happening now is that shoppers are doubling down on essentials and lower-priced goods and they’re waiting to make [non-essential] purchases until later in the year.” A Salesforce sentiment survey conducted in April, 2024 showed three-quarters of consumers waiting until Cyber Week to make bigger purchases: “Furniture, appliances, those big ticket items, because they know that’s when they’ll get a better deal.”

    It’s a Catch-22 for retail. “If they don’t need it now, they’re going to wait.”

    Dig deeper: Salesforce piles on the Einstein Copilots

    Discounts remain important to shoppers

    Predictably, consumers are still attracted by bargains. “We saw higher discount rates last year, but I wouldn’t say substantially higher than the year before,” Schwartz explained. “It’s a balance for retailers right now, margins and profitability against deeper discounts.”

    If discounts are motivating for shoppers, another important prompt is free shipping. “That’s a little bit different than what we saw in 2020 and 2021. They wanted the product fast and were willing to pay for it. Now speed is not a top factor; it’s all about cost.”

    Strategies that Schwartz identified for retailers included implementing tools that can do intelligent pricing and promotions — right-time and right-price to the right customer, so not over-promotional. This, of course, requires tracking consumer behavior data: traffic data, information about past purchases, what discounts they’ve used in the past and how they’re using loyalty programs.

    “Loyalty is another factor that’s driving value for consumers,” said Schwartz. “One of the top factors driving decision-making is whether a consumer can earn and redeem loyalty points. That’s a value play for this price-conscious shopper today.”

    The rising cost of targeting new customers

    In addition to balancing profitability against the increased demand for discounts and free shipping, brands also face the growing cost of digital marketing. “Targeting new customers is becoming even more expensive,” said Schwartz.

    What’s driving higher customer acquisition costs in 2024. “We’re in the middle of an election year. Election campaigns are buying up advertising. Temu and Shein are buying up Facebook advertising, Meta advertising. That’s making costs go up for everyone else because there’s less available inventory.”

    Read more about the Q1 Shopping Index data here.

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    The post Salesforce: Shoppers are saving their big moments for later in 2024 appeared first on MarTech.

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