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This article was provided by eCom News.
Globally, ecommerce revenues have dropped 3 percent in the first quarter of this year, when compared to that same period in 2021. That decline was seen in Europe as well (-13 percent). However, online sales in Spain reached a 6 percent year-on-year growth. It’s the only country in Europe where digital revenues grew in this time frame.
The global growth of online sales has been slowing down in previous quarters, as shown in previous research. However, the decline in online revenue is the first recorded decline in the 9-year history of the Salesforce Q1 Shopping Index. The decline forms a stark contrast to the global online revenue growth in Q1 in 2021 of 69 percent.
Strong decline in online sales in Europe
According to Salesforce, the decline can be linked to inflation. Consumers have less purchasing power, which leads to a dip in online spending. Global ecommerce revenues have declined 3 percent, while online traffic declined with 2 percentage points. Order volumes were down 12 percent.
When looking at the data for ecommerce in Europe, specifically, online sales had declined even stronger (-13 percent) when compared to the situation a year before. Order volume in the first quarter has declined 17 percent in Q1 this year. This is likely caused by inflation, high fuel costs and the war in Ukraine.
‘This is a signal of a larger consumer behavioral shift.’
“Inflation has caught up with bullish spending, with consumers buying fewer items from fewer retailers”, said Rob Garf at Salesforce. “This likely is not a temporary mindset, but a signal of a larger consumer behavioral shift. To address this, retailers should remove friction between physical and digital channels to attract and retain loyal shoppers.”
Online revenues in Spain continue growing
Remarkably, Spanish online sales managed to reach a 6 percent year-on-year growth in Q1 this year. In 2021, ecommerce revenues in that country reached a 70 percent year-on-year growth in Q1. While revenue growth is slowing down, it was the only market in Europe that grew in the first quarter.
Growth of BNPL
Another notable outcome of the report is the fact that flexible payment options such as ‘buy now, pay later’ are increasingly popular. In the first quarter of this year, up to 9 percent of global digital spend was done using BNPL. This is a 20 percent year-on-year growth and a 9 percent growth when compared to the fourth quarter of last year.
‘Up to 9% of all global digital spending was done using BNPL.’
Specifically, in the UK, BNPL accounted for 12 percent of all digital spending in the first quarter. This was a 37 percent year-on-year growth. BNPL usage rates in Q1 were the highest in Germany, Belgium and the Netherlands. The year-on-year growth of BNPL usage was the greatest in France, Italy and Spain.
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