Online Shopping Set to Surge This Holiday Season

Online sales have skyrocketed in the past year thanks, in part, to people purchasing goods they didn’t previously consider buying on the web prior to the pandemic, such as groceries and household essentials.

Driven by this rapid rate of adoption, CRM leader Salesforce forecasts that ecommerce’s footprint will double this holiday season, accounting for 30% of all U.S. retail sales, up from 14% last year. Total digital sales in the U.S. are forecast to reach an all-time high of $221 billion.

Despite the rise of ecommerce, the cloud-based software company anticipates overall U.S. holiday spend to be flat at an estimated $730 billion in sales.

The growth represents a long-term shift in how people shop, particularly for groceries and other essential items, which Rob Garf, vp of industry strategy and insights at Salesforce, believes is here to stay.

“Each holiday season we see new and different digital behavior created,” he explained during a presentation of the data. “What happens is that new behavior doesn’t snap back [to] pre-holiday shopping, and that will be the case for the holiday in the context of the pandemic.”

To help break through the noise and attract customers, Garf noted that brands are setting up direct-to-consumer sites, selling on social platforms and offering subscription models, the latter of which he thinks will be a particularly popular option.

“Do consumers really want to visit 25 different websites to buy their essential products on a recurring basis? Probably not,” said Garf. “They want to have as frictionless [an] experience as possible, and that will mean subscriptions.”

The company predicts that the change in consumer demand brought about by life under quarantine will create a new list of hot holiday products, which include home fitness, beauty, and toys and games. These will supplant some of last year’s best-selling categories, such as footwear, general apparel and luxury apparel.

“What you see this year, it’s shifting a bit,” Garf said. “It really has a theme that revolves around health, safety and fun.”

Electronics and gaming is expected to maintain its position from 2019 as this season’s top category.

Online sales will also benefit from people wanting to avoid crowds on Black Friday and beyond during the holidays, as well as Amazon pushing Prime Day to mid-October from July due to issues related to Covid-19. But there is a downside for retailers and customers: Salesforce foresees that up to 700 million packages around the globe will experience shipping delays as orders exceed fulfillment capacities. The amount of returned merchandise is also bound to spike.

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