Ecommerce grows by 11% but inflation slows consumption

Salesforce, a multinational technology company based on Customer Relationship Management (CRM), has just published the latest purchase index report, with data on ecommerce during the third quarter of 2021. The values ​​point to an 11% increase compared to the same period in 2020, but inflation is worrying and causes online traffic to fall in all categories and sectors, and the consumers pay 12% more for the same products.

Retail performance in the third quarter was strong, with global online spending growth of 11% compared to the same period last year, a recovery from a meager 2% in the previous quarter. The furniture category continues to perform well in this period, registering the highest growth compared to other categories, with an increase of 50% compared to the third quarter of 2020. The electronics and accessories category experienced the largest drop in consumer spending (9%), comparing the same period in the two years.

But the growth of online shopping is always a combination of higher traffic and consumer spending, and this year is the first time we see an increase driven entirely by the growth of consumer spending, while at the same time traffic. is decreasing (-2%). This is not a surprising decrease, as as the world changes, consumers return to their normal lives, which probably means fewer online visits and more physical traffic. But increases in consumer spending are underpinning all e-commerce growth, with a 13 percent increase in the third quarter.

Inflation caused by e-commerce slows consumption

As the economy emerges from the pandemic, inflation was expected to have a temporary effect on prices, but eight months later, the reality is clear: inflation is here to stay much longer than we think initially. Driven by higher consumer demand, higher government spending, labor shortages, and crisis in supply chains, the reality is that inflation is taking a hit. significant impact in consumer wallets.

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The US Bureau of Statistics It estimates that inflation in September and in all sectors was 5.4%, mainly driven by sharp increases in energy prices. However, the Salesforce data shows something different since the company, unlike the American institute (which analyzes the data through a combination of consumer surveys and data collected from retailers, professional offices, and other establishments across the country) Analyze transactional data from online purchases. In the Salesforce analysis, it takes into account the prices that consumers are paying this year, for the same products and compared to last year, as well as the prices of new products that entered the market this year, compared to the last year.

The data indicate that inflation is affecting retail and consumption at a faster rate. In the third quarter of 2021, consumers around the world paid 12% more for the same products they bought last year. Furniture is seeing the largest price increase, with growth of 32% in the last quarter, a trend that is not surprising given the challenges the industry supply chain has faced since the inception of Covid. But electronics and toys are also showing unprecedented price increases, with both seeing 21% growth from last year.

When we look at the products that have just hit the market, the growth is even more expressive. New products that arrive during the third quarter of 2021 trade at an average price 14% higher than that of new items that arrive on the market in the third quarter of 2020. The sectors that lead this growth are beauty, toys, decoration and handbags.

From these data, it is clear that consumers are paying more for their products, factor that inevitably leads to changes in consumption habits, a restricted supply and high unemployment, with the world heading towards periods of stagflation.

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