CRM leader Salesforce expects digital sales to top US$1-trillion globally from November through to end December 2021, but consumers, retailers, and suppliers are predicted to face rising costs and decreased inventory due to pressure on the global supply chain.

The company recently outlined consumer insights and predictions for the 2021 holiday shopping season.

The impact of the worldwide pandemic on digital shopping habits is expected to persist. Though the rise in online commerce may not compare to last year's historic 50% surge, total sales are expected to reach record rates for the upcoming holiday season. Salesforce forecasts:

• 7% year-over-year overall growth in global digital commerce for November and December (slowing down from 50% year-over-year growth in 2020)

• Total digital sales are expected to reach a record high of $1.2 trillion globally

• Digital commerce growth will be driven by a 20% rise in consumer prices despite fewer global (-2%) holiday orders expected

Despite this global rise, the market for retailers, suppliers and consumers has become more challenging. Manufacturing capacity, logistics costs and labour shortage have become pressure points in the industry which is likely to cause higher retail prices for merchandise. On top of that, product availability is likely to decrease replacing shipping delays as the season’s biggest spoiler.

Nevertheless, the rise in prices and costs remains unlikely to deter consumers from spending this festive season, the first that resembles relative normality in two years.

According to Bob Garf, VP and GM, Retail at Salesforce, the extended supply chain will bear the burden of rising costs.

Research shows that consumers will see a 20% price increase, will place 2% fewer orders compared to 2020, and buy now pay later usage will double to 8% of all orders.

“One of the most common questions I get from customers, from media is ‘we are hearing these rumblings about the supply chain… products are getting stuck at the port, there aren’t a lot of factory workers to produce the product, even if it gets to the port, how do we get it off the vessel, out of the container and into the supply chain, into the domestic supply chain?”

This is causing rising costs globally, said Garf. “What we are seeing is that suppliers and retailers will see an additional 30% cost throughout the supply chain, this equals the manufacturing logistics and even the store.”

A switch to t-commerce

Bluegrass Digital CEO Nick Durrant believes television commerce or t-commerce is a growing trend across the globe, where consumers can instantly purchase products that appear on TV.

Bluegrass Digital CEO Nick Durrant.

According to Durrant marketers are integrating e-commerce opportunities into TV content that allows interactive live TV shopping.

He believes B2B and B2C companies should take notice of t-commerce and how it will impact the industry. Smart TV ownership is growing steadily and is set to surpass 50% of homes globally by 2026.

According to Strategy Analytics, shipments are expected to exceed 200 million units per year in 2022.

“Less than two years ago, very few consumers could have envisioned themselves shopping online or on their smartphones. Mobile commerce sales have grown phenomenally over the past 10 years, from less than US$25-billion in 2012 to an estimated US$208-billion in 2018. According to eMarketer, m-commerce is to double its share of retail sales by 2025,” said Durrant.

According to Durrant proprietary home grown smart TV operating systems are steadily giving way to platforms developed by the likes of Google and Amazon "whose expertise and experience in developing and supporting software platforms is helping to drive improved user experience and deeper consumer engagement."

Bluegrass Digital asserts that Smart TVs are opening an entirely new channel for brands to provide another personalised shopping experience, especially considering that this device is still the biggest and most-watched screen in most homes. Companies need to evaluate t-commerce opportunities and develop strategies to make TV an end-to-end path to purchase.

The company references Hulu research, which states that consumers spend twice as much time engaging with a brand when their ads are interactive. Compared to standard advertisements, it says the purchase intent increases by 160%. With a lot of brand channel opportunities, it is clear that shoppers would purchase items directly from the TV if given the chance.

“T-commerce is the future of shopping and marketers across the globe are already implementing strategies to engage with consumers on television. It's now part of the omni-channel, another opportunity to give consumers what they want, when they want it,” noted Durrant.