The first half of 2017 has certainly seen some dramatic ups and downs for the retail industry. We have witnessed retail mammoths stumble, some independent shops thrive, and Amazon continuing to dominate the news cycle. According to the Q2 Shopping Index, shopper spend has outgrown traffic, leading digital growth and shifting the ecommerce landscape as we know it.


Amidst this whirlwind of change, how are shoppers impacted?

Our data shows that shoppers benefited from the sales slump many retailers are experiencing, as Amazon continues to take share and companies employed aggressive tactics to entice consumers back to their websites.

First, data shows that discount rates have grown at a greater clip in the first half of the year, up 9% year-over-year to 18% in Q2. That amounts to a threefold discount rate increase over the prior year’s growth of 3%. Shoppers were certainly getting some great deals as retailers fought for their business.

A second promotional tactic that increased in adoption was free shipping. Typically, free shipping rates fall by an average of 12% to 14% to 61% after the end of the holiday season. But this year, retailers dropped free shipping at a rate of only 8%. Data shows that 70% of all orders placed online shipped for free in Q2, a rate never before seen outside of the Christmas/Holiday season. In fact, over the last two years, the number of orders that shipped free of charge increased by 17%. Is this a sign of retail distress or the new normal, a perk that Amazon has trained shoppers to expect from all retailers? Only time will tell, but this data coupled with the aggressive discounting rates suggest a full court press by retailers to lure consumers back online.


All this data begs the question, are these tactics working?

The answer is complicated. Shoppers are spending more per site visit, but retailers are not attracting shoppers at the same rate they did in the past. Shopper spend was up 8% year-over-year with average order value increasing 2% year-over-year. This is the strongest Q2 AOV growth we’ve seen in two years, especially considering that it fell by half a percent just last year. Shoppers also purchased more – units per transaction increased by 1% YoY compared to a 1% decline the year prior.

The takeaway is that retailers have to work harder than ever to engage with and retain customers on their site. In short, it’s never been harder to make a sale online. In order to capitalize, leading retailers are implementing next-generation technologies like AI to personalize the shopping experience and drive greater engagement with their customer. Investments in personalization will carry even greater importance if this trend continues.

These trends from the first half of 2017 are changing retail. To keep your finger on the retail pulse, I encourage you to read the Shopping Index and follow Salesforce Commerce Cloud.