A new global report from Salesforce, a global leader in CRM (Customer Relationship Management) shows e-commerce growth fell in Canada again in the third quarter by nine per cent – which is further down from the eight per cent decline seen in Q2, showing consumers are expecting discounts in the next few months as they get ready to cross items off their shopping lists.
The new data comes from Salesforce’s global Q3 Shopping Index — which analyzed the activity and online shopping statistics of more than 1.5 billion unique global shoppers from more than 67 countries.
Canadian data highlights include:
- In shopper spend, the per-visit average amount spent by shoppers sat at $2.17, down from $2.37 in the last quarter; and
- Canada saw a 1.9 per cent overall conversion rate compared to 2.1 per cent in the last quarter.
Global data highlights include:
- AI is expected to influence $194B in global online sales this holiday season; orders where shoppers clicked a product recommendation powered by AI increased six per cent for Q3;
- After several years of people switching brands, recent quarters have shown continuous growth in repeat buyers. For Q3, in particular, the share of orders from repeat buyers was 43 per cent.
Rob Garf, VP and General Manager, Salesforce Retail, said in Canada there were some promising at the cart and traffic numbers which leads Salesforce to believe that people are going online.
“And they’re doing one of two things. They’re waiting and they’re waiting patiently for the biggest and best deals . . . They’re taking control of their balance sheets and waiting for the best value,” said Garf.
“And the second piece is people are just going back into the store. So looking just on the online metric doesn’t tell the full story. You’re really able to extract the point that people are going online. Yes they’re waiting, they’re waiting patiently. But they’re also in many cases just going into the store and buying.
“I’m not overly concerned with the sales performance online for Canada in Q3 and the beginning part of the holiday. No retailer I’m talking to is overly bullish about growth online through the whole holiday season. This isn’t a surprise to me. It’s not a surprise to them. I look at it that it’s as good as it’s going to be this holiday.”
Garf said retailers are realistic about online growth this holiday. It’s not a surprise. They’ve been planning for this since the summer and have been very measured in terms of the inventory. They’ve been very conservative with their discount rates and their promotional calendar.
“There’s been a real eye on profitability. While growth won’t be huge, we’re seeing inflation in most categories come back to earth. We’re seeing retailers manage their margin much tighter especially around inventory, discounts, returns and shipping,” he said.
“So they’re looking to exit this holiday with a really solid profitability footing, setting the foundation for growth next fiscal year. I am the co-chair for our customer advisory board. So I asked (a few) weeks ago a group of them, we have about 25 on the board and 12 of them were on this call, some were from Canada, and we said how would you summarize the objective and the outlook for the next fiscal year. And all of them were focused on growth.
“They were focused on the profitability. Actually focusing on this idea of customer profitability in the context of growth. So people are feeling like we’re turning a corner in Canada, in the U.S., across Europe. Europe is a leading indicator. Except for the UK, we’re seeing some nice rebound in all online metrics. The bottom line is retailers are feeling optimistic going into next year and they’re setting the foundation through profitability to give them the springboard for growth.”
Garf said the resale market is going to be a headline this holiday.
“We’re anticipating, we’re forecasting, 17 per cent of all gifts are resold merchandise. Part of that is consumers looking for value. Part of it is consumers looking to save the world. And another part that plays into it consumers are really into this whole idea of vintage. So it’s this perfect storm across those three dimensions that leads to this resale market which I’m really excited about,” he said.
Meanwhile, Salesforce’s top executives have shared their predictions and insights for the year based on market analysis, customer conversations, and more in the company’s new Future of Tech and AI Predictions & Trends report.
2024 trends and predictions include:
- Data will continue to get democratized — and smarter. This means 2024 will see a strong focus on data privacy and compliance.
- AI will transform enterprise, so businesses that don’t embrace AI will be left in the dust.
- AI brings a new era of cyber security, meaning cyber defense will take shape to address new threats.
- AI will hypercharge efficiency and we will all get familiar with the term “semantic query.” As AI grows smarter and more businesses embrace it, we will inch closer to autonomy.
- There are possibilities to use AI for good but only with equitable access.
- AI will modernize work and transform the office into a smarter workplace, plus change how we think about (and measure) human productivity.
These 2024 predictions follow recent Canadian-specific survey data from Salesforce earlier this fall, which found that:
- On average, employees believe generative AI will save them four hours per week. However, 55 per cent agree that they don’t have the skills to use generative AI effectively and safely.
- While 62 per cent of employees use or plan to use generative AI at work, 79 per cent believe generative AI introduces new security risks.
