Inflation erodes consumer budgets! US holiday season online shopping orders will drop 5%!

It is learned that according to foreign media reports, the total number of online orders in the United States will decline during the 2022 holiday season as consumers' spending budgets are limited by inflation.

According to cloud software company Salesforce, online orders will fall 5% in the U.S. and 7% globally during the 2022 holiday shopping season compared to the same period in 2021. Salesforce also noted that online sales will remain "essentially flat" in November and December. The reason: sales will fall in December compared to November, but prices will rise.

The report said that the prices of household necessities, including rent, electricity and groceries, have been rising, which has seriously eroded the wage growth in the United States over the past year and a half, thus limiting consumers' purchasing power. This is an unfavorable development for retailers who are looking to achieve their financial goals through year-end shopping sprees.

But it is worth celebrating that American consumers' demand for online shopping has not declined. According to data from the US Department of Commerce, US retail sales unexpectedly rose in August.

Data from retail research and data firm Morning Consult shows that shoppers will make trade-offs in gift spending under the weight of high prices during the 2022 holiday season. While consumers are unlikely to cut back on spending on groceries, celebrations and gifts, they will cut back on spending on travel, decorations and alcohol.

At the same time, rising production costs, including labor and transportation, will outstrip retailers’ ability to pass on costs to consumers, putting 10% of retailers’ profits at risk, Salesforce said.

Rob Garf, vice president of retail at Salesforce, added that retailers are feeling unprecedented pressure on margins due to increases in labor wages, fuel prices and inventory transportation costs. Controlling costs through automation and scaling operations is critical.

Editor ✎ Nicole/

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