Klaus Staubitzer, chief procurement officer and head of supply chain, Siemens AG

“Recent events, like the Covid-19 pandemic and focus on sustainability, have given us the opportunity to establish procurement and supply chain as a key value function instead of a simple support function,” Klaus Staubitzer, the chief procurement officer and head of supply chain at technology and engineering giant Siemens AG, says in a new report on procurement industry trends from Economist Impact and business software company SAP SE.

But the report notes that living up to that “key value” provider role isn’t easy and requires more coordination among procurement and other business departments as companies deal with ongoing supply chain threats, such as the armed conflicts in sea lanes that arose after the pandemic.

The report, “Across the procurement-verse: changing trends in the procurement function,” is based on a first-quarter 2024 global survey of 2,307 senior executives across various business operations, including supply chains, financial management and human resources as well as procurement.

The report asserts that while most executives recognize that procurement departments have made notable strides in collaboration with other departments, “procurement teams have considerable room to improve collaboration skills.”

“While 75% of executives agree that procurement collaborates effectively with the business on issues of strategic importance (up from 53% last year), only a fraction of these (18%) have high confidence in procurement doing so, and only 14% have high confidence in the application of procurement insights across the organization,” the report says. “Procurement has yet to gain the full trust of stakeholders in this area.”

The report, citing crucial trends in AI and supply chain diversification, also asserts:

• Procurement’s success in digitalization increasingly rests on its ability to adopt and master emerging technologies.

“Accelerating digitalization is the highest procurement priority for the majority of respondent organizations over the next 12-18 months, and AI adoption is a centerpiece of these efforts, cited by 44% as a top technology priority,” the report says. “The respondents make clear AI should play a key role in improving procurement process automation.”

• Procurement teams are seeking a balance between centralized and decentralized operating models.

Asked about procurement operating model changes in the next 12-18 months, survey respondents said their intentions were roughly evenly split between two directions: “One is increasing the role of centers of excellence (CoEs), which support best practices in strategic sourcing, knowledge management, performance tracking and other areas. The other is adopting a center-led model, in which the central procurement team makes decisions in key areas while leaving business units to decide on unit-specific procurement matters. CoEs complement and support a center-led approach.”

• Businesses look to reduce supply chain risk in the long term by prioritizing supplier diversification — a priority cited by 40% of surveyed executives.

“In the shorter term, meanwhile, companies are putting stronger emphasis on supply-base consolidation (26% in 2024 v. 10% in 2023) given the push to build trusted relationships to overcome supply-chain challenges,” the report says.

Procurement and supply chain teams are also using new technology applications to improve how they ensure getting the right products for their organizations.

Pushing procurement’s more valuable role

For example, the report notes that Siemens uses “a digital twin (a digital model of a real-world product, object or process) to analyze, with precision, the material cost of the parts it purchases and how they are produced.”

The report adds that Staubitzer’s  team at Siemens now also uses the tool to determine the CO2 emissions of those parts as well as the carbon footprint of the supplier’s entire operations. The survey uncovered a similar trend, noting that 46% of CPOs “prioritize carbon footprint mitigation, more than any of their counterparts.”

“Our suppliers are sometimes surprised that we have a better breakdown of these details than they have from their own calculations,” Staubitzer says.

Roman Belotserkovskiy, a partner in the Austin, Texas, office of the global management consulting firm McKinsey & Co., says the inflation trends in recent years have provided an opportunity for procurement teams to demonstrate their value and increase their prominence.

“CPOs who did well are those who went and found new sources of supply or who focused on protecting revenues or margin, rather than focusing exclusively on cost,” he says in the report.

Belotserkovskiy has also observed an increase in the number of CPOs presenting to their board of directors — another sign of increased prominence.

“That was very rare two or three years ago,” he says.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Emily Newton

Automated guided vehicles (AGVs) have become more common at supply chain locations worldwide, transporting containers and other loads between ships, trucks, rail cars and warehouses. Why are more leaders using them? Most use cases relate to relieving congestion and improving operations when ports experience record-setting traffic levels. Decision-makers recognize how AGVs can streamline their supply chains, keeping containers moving and preventing costly delays.

Accelerating the Movement of Goods

The supply chain’s persistent labor shortage can cause staffing crises that are particularly impactful during peak periods. Some leaders have deployed AGVs for material handling tasks, finding that such efforts help them maintain high productivity.

One example came from China’s Ganqimaodu land port. Each AGV moved between this port and a Mongolian coal stockyard, carrying two standard containers of imported products along a 1.86-kilometer route. An AGV takes 50 minutes per round trip and travels up to 25 kilometers per hour.

The AGV operator using them in China has 30 in its fleet, using 24 each weekday. They move 10,400 tons of coal daily during 160 total round trips. Additionally, there are 30 AGVs in Mongolia. Supply chain managers believe that using all 60 simultaneously will allow for achieving a 15-million-ton transport capacity.

To provide perspective on the overall coal-related activity at the port, leaders said each arriving truck holds up to four standard containers and makes four to six round trips per month. This initiative was the first instance of AGVs used at a land port for cross-border transportation, showing the potential of such applications.

Examples such as this show how AGVs can minimize supply chain staffing shortages, keeping each port as productive as possible during those challenging times. Moreover, AGVs can support other automation projects to relieve labor needs.

Japanese officials plan to address the labor shortage with a conveyor belt from Osaka to Tokyo. The so-called Autoflow-Road project would include infrastructure above and on the sides of roads, as well as tunnels underneath major highways. Estimates suggest this system could move loads equal to that of 25,000 trucks daily, and that each container placed on the conveyor belt would hold up to 1 metric ton of goods.

Facilitating Improved Forecasting

Multiple partners often handle goods moving through supply chains, especially when those loads require multimodal transport solutions. Clients understandably want progress updates on their container loads so they can plan associated operations accordingly. Managers frequently deploy connected technologies to meet those needs.

For example, the United Kingdom’s Port of Dover has an advanced digital twin that predicts the associated tidal flows and weather conditions, supporting safe arrivals and departures. That tool complements a landside digital twin that optimizes traffic flows and port operations while supporting decarbonization and energy efficiency efforts. Such visibility enhances predictions and reduces the reliance on guesswork. Supply chain clients benefit by passing on more accurate information to their customers, increasing the likelihood of repeat business.

People worldwide have warmly embraced online purchasing, appreciating its convenience and efficiency. In 2023, U.S. B2B ecommerce sales surpassed $2 trillion and U.S. retail ecommerce sales topped $1.1 trillion. And analyses suggest global retail ecommerce sales will surpass $8 trillion by 2027. Shoppers who receive correct estimates of incoming parcels can adjust their schedules accordingly, remaining available when they arrive.

Improving Resilience

Supply chain experts frequently assess their business models, identifying new ways to protect their networks from shocks that could severely disrupt their operations. Many search for process improvement options, knowing that even small tweaks can significantly improve outcomes.

These professionals must focus on the things within their control to minimize the effects of those that are not. Then, they remain better equipped to handle the various fluctuations common to their industries.

Freight indexes are nearly 10 times higher than pre-COVID-19 levels. However, leaders who use AGVs and other automated tools to strengthen their supply chains have more oversight and influence over the impact of supply chain fluctuations. Improvements could free up money in the budget for aspects outside their control.

Decision-makers may implement AGVs as part of more-extensive automation strategies, knowing targeted improvements will keep them competitive and profitable. A logistics company did that to prepare for Singles Day, which has become one of China’s most notable online shopping days. Business leaders created a robust, end-to-end system to support the supply chain from first-mile pickups to last-mile deliveries.

That all-encompassing effort allowed the enterprise to deliver more than 200 million parcels to customers who shopped for the occasion. AGVs played a significant role in the success. A single Thailand warehouse has 100 of the machines, which collectively reduce employees’ walking time by 90%. This example shows that AGVs can support higher efficiencies along the supply chain.

Planning AGV Utilization

Today’s supply chains pose increasing challenges, but automated guided vehicles can overcome many of them. However, any AGV-related plans must carefully consider worker training, traffic flow, tech infrastructure and other necessities.

Addressing those matters early in the process boosts the chance of success and provides a strong return on investment. Getting inspired by supply chain partners currently using AGVs in their processes is an excellent way to explore what is possible.

About the author:

Emily Newton reports on how technology disrupts industrial sectors. She’s also the editor-in-chief of Revolutionized, covering innovations in industry, construction, and more.

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Steve Brass, president and CEO, WD-40 Co.

In a recent earnings call, he said the manufacturer and marketer of industrial and residential lubricants, degreasers and cleansers is making progress on its four “must-win” competitive market battles:

• Geographic expansion worldwide.
• Increasing premium product sales.
• Growing its Specialist product line for mechanics and other professionals.
• Accelerating digital commerce.

Although Brass listed ecommerce fourth on the company’s must-win list, he said it was critical to the other three.

“We see [ecommerce] as an accelerator for all our other must-win battles, as it improves brand awareness and online engagement, leading to an improved customer experience and sales across all our trade channels,” Brass said on a recent earnings call, according to a transcript from Seeking Alpha.

He added, “Some of our key objectives within this must-win [ecommerce] battle are to build our brand digitally, grow and develop the ecommerce pure play channel, accelerate growth of the omnichannel, and continue capability-building for our employees.”

Brass went on to note that WD-40’s digital commerce strategy resulted in an 18% company-wide year-over-year ecommerce sales increase through the first nine months of its current fiscal year, “with double-digit growth across the company’s three trade blocks of EIMEA (Europe India Middle East Africa), the Americas, and Asia-Pacific.

The company said total net sales rose 9.4% to $155.05 million for the fiscal third quarter ended May 31; net income increased 5.0% to $19.84 million from $18.90 million.

For the nine months ended May 31, net sales increased 9.5% to $434.57 million from $396.80 million as net income rose 7.0% to $52.86 million from $49.42 million.

Growing sales through online distributors

The company has said its sharpest growth is via ecommerce sales through such business-to-business ecommerce sites as Grainger.com, MSCDirect.com, GlobalIndustrial.com, Fastenal.com and MotionIndustries.com and such online retailers as Amazon, Ace Hardware and Aubuchon Hardware. WD-40 customers can link directly to these ecommerce sites from WD-40.com.

WD-40 is also taking other steps with digital technology to build on its online interactions with customers and drive up operating efficiency.

An online contest WD-40 launched in 2021, Repair Challenge, has invited customers across more than 40 countries — including “doers, makers, fixers and builders” — to show how use WD-40 lubricants and other products to extend the lifespan of their tools, bicycles, cars and other items. Brass said that, so far, the contest has created over 0.5 billion online marketing impressions worldwide.

WD-40 is also “making foundational investments in systems and  data that will allow us to grow faster,” Brass said. For example, he said WD-40 had rolled out Salesforce Inc.’s CRM technology in the U.S. and will be expanding it in the near term, “driving sales efficiencies and effectiveness.”

“Use of data analytics and automated tools, leveraging data is increasing and can be a real enabler for the business,” he said. “The foundational work we are doing now around data governance, centralizing our data architecture and data quality management will allow our people to leverage our data quicker and drive better decision-making.”

Brass added that WD-40 has engaged an investment bank to seek suitors for its U.S. and U.K. home-care and cleaning product brands, which account for about 4% of total sales, and expects to sell them in the company’s 2025 fiscal year.

“Post divestiture, WD-40 Co. will be a more focused company with a higher sales growth and gross margin profile,” he said.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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For example, the outlook for ecommerce sales in 2024 remains optimistic among small and medium-sized businesses (SMEs).

65% of respondents anticipate that their ecommerce sales will increase year over year (2024 compared to 2023), with 24% expecting a significant increase and 41% predicting a slight increase, according to the survey.

“The agility of ecommerce platforms allows SMEs to quickly adapt to market changes, manage costs more effectively and reach a broader, global customer base, all without the overhead costs associated with traditional brick-and-mortar operations,” the survey says. “As inflation continues to drive up the cost of goods and services, ecommerce provides SMEs with tools to optimize pricing strategies and streamline supply chains.”

DHL findings on ecommerce sales

Inflation and shipping costs are prominent concerns for ecommerce businesses today. The survey reveals that 40% of respondents view shipping costs as the biggest threat to their business, while 38% identify inflation as their primary challenge. Likewise, 60% of respondents note that inflation is the top issue they will be following for the rest of the year.

International expansion is a key focus for SMEs in 2024. Over half of the survey respondents (53%) see international growth as the biggest opportunity for their ecommerce business. This is further supported by their priority markets for expansion, with 43% targeting the European Union and United Kingdom, and 29% looking toward Mexico and Canada.

“Overall, SMEs remain optimistic about the potential for ecommerce growth despite the economic hurdles,” according to DHL.

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But that boom in how consumers and businesses go online to purchase goods and services — at work and home — is taking a huge strain on the global resources and the environment, says a new report from the United Nations Conference on Trade and Development.

The digital economy is booming. Annual smartphone shipments have more than doubled since 2010, hitting 1.2 billion in 2023. And Internet of Things (IoT) devices are projected to surge 2.5 times to 39 billion by 2029, from 2023. New data from 43 countries shows business ecommerce sales grew 60% from 2016 to 2022, to reach $27 trillion. The data represents about three-quarters of global gross domestic product (GDP).

This growth is taking an increasingly heavy toll on the environment, according to the UN report.

Ecommerce role in the environment

The digital economy is resource-intensive. A four-pound computer requires 1.7 pounds of raw materials.

While the production phase is the most impactful — generating some 80% of smartphone greenhouse gas (GHG) emissions — environmental harm occurs throughout the lifecycle of devices and information and communications technology (ICT) infrastructure, including through ecommerce, according to the report.

Digital waste is growing faster than collection rates. Waste from screens and small IT equipment rose 30% between 2010 and 2022, reaching 10.5 million tons. Improper disposal leads to pollution and other health and environmental hazards.

Increasing demand for data transmission, processing, and storage for recent technologies like blockchain, artificial intelligence (AI), fifth-generation (5G) mobile networks and IoT is boosting emissions. For example, the ICT sector emitted an estimated 0.69 to 1.6 gigatons of CO2 equivalents in 2020, corresponding to 1.5% to 3.2% of global GHG emissions.

As digital devices become more complex, they require more mineral resources. Phones used 10 elements from the periodic table in 1960, 27 in 1990 and 63 in 2021.

As a result, demand for critical minerals critical for both digital and low-carbon technologies is soaring. For instance, demand for cobalt, graphite and lithium is expected to increase by 500% by 2050, according to the World Bank.

A pressing concern is digitalization’s increasing energy and water needs. In 2022, Google’s data centers and offices consumed more than 21 million cubic meters of water. Newer technologies, such as generative AI, also require more potable water for cooling servers.

In the U.S., one-fifth of data center servers’ direct water footprint comes from watersheds that are moderately to highly water-stressed, according to the report.

“The digital economy currently generates excessive waste, reinforced by programmed obsolescence – the built-in reduction of a product’s lifespan due to technical, functional or psychological reasons – in modes of production,” the report says. “A circular economy minimizes waste and maximizes resource use through reusing, refurbishing, recycling, and extending product lifespans.”

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A Houthi spokesperson stated in December that they would target “ships affiliated to Israel or transporting commodities to Israeli ports” and continue to do so if “food and medicine keep not accessing the Gaza Strip.”

The online freight-booking and payments platform said it facilitated a 32% year-over-year increase in the number of transactions to 316,500, exceeding management’s Q2 expectations.

Freightos transaction volume in Q2

Freightos said in a statement that it had expected transaction volume to grow between 27% and 29% to a range of 303,000 and 309,000 transactions. It also said the Q2 growth rate of 32% outpaced its long-term targeted growth rate range of 20-30%.

“This significant transaction growth highlights the growing adoption of digital solutions in the freight industry,” Freightos said.

Freightos added that steady freight prices resulted in corresponding increases in its Q2 gross booking value. It also exceeded expectations by growing 31% to $203.4 million. Freightos had expected Q2 booking value would rise only 15%-18% to a range of $178 million to $182 million.

Freightos lets importers and exporters compare freight shipping rates, book shipments and pay for services through Freightos.com. It also provides software for air and ocean carriers and freight forwarders for managing quoting, pricing, bookings and other operations.

An expanding base of buyers and carriers

Despite its prior slower-growth expectations, Freightos prepared in Q2 for more long-term growth by expanding its air and ocean carrier network by 38% to 51 from 37 carriers. In addition, its number of unique “buyer users” in Q2 increased 16% to approximately 19,000.

Freightos notes that its buyer organizations range from small and midsized businesses to large multinational organizations. Its number of buyer users includes all the individuals placing bookings on its platform. A spokesman adds that Freightos has an average of more than 5,000 bookings per workday.

“This growth underscores the ongoing marketplace network effects, where buyers attract sellers and sellers attract buyers,” Freightos said.

Handling spot freight market growth

Freightos also attributed its growth to its ability to serve the spot freight market, or freight shipments handled outside of long-term contracts.

“This momentum represents the continued digitalization of the spot freight market, estimated to comprise 30%-50% of the total air and ocean freight market,” the marketplace company said.

As part of its carrier network expansion, Freightos in June announced agreements with Thai Airlines and Coyne Airways, carriers on Freightos.com that will use the WebCargo by Freightos digital booking and payment platform to manage freight services across areas including Asia, Africa, and the Persian Gulf and Caspian regions.

Barcelona, Spain-based Freightos said it will host a conference call to discuss its Q2 financial results and Q3 outlook on Aug. 19.

Here’s last quarter’s update on Freightos.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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The post Digital commerce bolsters omnichannel sales for Johnson Controls appeared first on Digital Commerce 360.

About 30,000 businesses on the marketplace use Alibaba’s AI tools to increase product exposure in targeted markets, a practice sellers on the marketplace say helps them grow even with limited internal staffs.

“Using AI has helped put my Alibaba.com store on autopilot and saved us a lot of time since it’s just me and one employee managing our business,” Sieu To, deputy managing director of Vietnam-based electric fan company Hanh Sanh Co., Ltd., says in an Alibaba press release issued today.

Alibaba.com is a unit of Alibaba International Commerce Group and serves more than 48 million buyers and more than 200,000 suppliers on its ecommerce platform worldwide.

Kuo Zhang, president, Alibaba.com

At an event to mark the United Nations-sponsored MSME Day today in Geneva, Kuo Zhang, president of Alibaba.com, participated in a panel discussion presented by the U.N. International Trade Center on the inclusion of small and midsized business in global trade. “As we promote wider adoption of our AI tools amongst MSMEs, we also hope to expand our global supplier base … we are building a global supply chain by and for MSMEs, leveraging AI,” he said.

Last month, the marketplace company surveyed 500 MSME companies that do business on Alibaba.com and range in size from one to 250 employees.

Among the survey’s findings:

• 25% to 35% of respondents use AI on a daily basis.
• Using AI tools led to an average 37% increase in product exposure to promote growth in commerce.
• Companies using AI tools accepted 70% of product optimization suggestions.

The survey also found that companies from developing countries accounted for much of the use of the marketplace’s AI tools. “Among the top 20 countries making the most frequent use of Alibaba.com’s AI tools, approximately 50% are from developing countries,” Alibaba says.

Earlier this year, Alibaba.com launched the latest AI-powered version of its Smart Assistant global sourcing tool. Alibaba describes the tool as an “intuitive personal guide to sourcing that helps small business owners discover new opportunities, stay up-to-date on trends, seamlessly track orders and more in a single, efficient touchpoint.”

Alibaba adds that businesses on Alibaba.com can diversify their product sources in markets known for specific product categories.

For example:

• In Northeast Asia, buyers can connect with natural ingredient skin care suppliers out of Korea and partner with home furniture and camera, photo and accessory manufacturers in Japan.
• In Southeast Asia, Vietnam is a supplier hub for seasoning and condiments, and home and outdoor furniture. Buyers can also seek out expert suppliers in India and Pakistan for loose gemstones and horse racing gear.
• In West Asia and Europe, carpets, men’s clothing and construction and building machinery suppliers can be found in Turkey. Buyers are able to tap into suppliers in Germany for industrial machinery and suppliers of wine, textile machinery and women’s apparel from Italy.

“Alibaba.com has helped me expand my business beyond Europe into markets like China, Vietnam, Bangladesh and Ghana,” says Maria Francesca Aceti, CEO of nutritional supplements supplier Deltha Pharma.

On its website, Deltha says it is looking for distributors throughout the world.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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The company, which provides cloud-based services and an ecommerce platform for merchants, expects “a challenging season” for shoppers and retailers alike. And “we can’t say shoppers didn’t warn us,” Salesforce said. That’s because shoppers have been searching for savings and waiting to make big purchases, it said.

“After remaining largely resilient throughout four years of economic uncertainty, consumers are finally feeling the pinch,” Salesforce said in a statement. “From sustained inflation to supply chain woes, consumers worldwide have been through a lot.”

Nearly a third of global shoppers (32%) reported using alternative credit services like buy now, pay later (BNPL) more frequently this year, according to Salesforce research.

Salesforce defines the holiday season as Nov. 1 through Dec. 31. In North America, 76 of the Top 2000 online retailers use Salesforce as their ecommerce platform, according to Digital Commerce 360 data. In 2022, those 76 online retailers combined for more than $116.97 billion in web sales.

Here are Salesforce’s five predictions about the 2024 holiday shopping season.

1. Chinese shopping apps will take over

The first Salesforce holiday shopping prediction revolves around two factors: prices and China. The company said 63% of Western consumers plan to purchase from Chinese shopping apps during the 2024 holiday season. That includes merchants such as Aliexpress, Cider, Shein, Temu and TikTok. And it all comes down to price, Salesforce said.

Rob Garf, vice president and general manager of retail at Salesforce, said sales increases have been “almost purely because of price increases, not increase in products sold.”

Order volumes have been falling since 2022, Salesforce said, and shoppers want their purchases to feel worth it. Salesforce projects that these Chinese shopping apps will take 21% of sales outside China itself in the 2024 holiday season.

2. Middle-mile shipping puts strain on margins

The second Salesforce prediction is that brands and retailers will spend an extra $197 billion on middle- and last-mile expenses during the 2024 holiday shopping season. That would be a 97% increase over last year’s holiday season.

The company said attacks in the Red Sea from Yemen-based Houthi forces and rising crude oil prices are driving container costs up worldwide. A Houthi spokesperson stated in December that they would target “ships affiliated to Israel or transporting commodities to Israeli ports” and continue to do so if “food and medicine keep not accessing the Gaza Strip.”

Salesforce cited a Reuters report assessing that “any ceasefire agreement would lessen the tension in the Middle East.” To date, Israel and Hamas have not agreed on terms for a ceasefire that would end the current Israeli military campaign. Israel has pushed for a six-week ceasefire, whereas Hamas has pushed for a permanent ceasefire.

Moreover, the collapse of the Francis Scott Key Bridge in Baltimore has stalled delivery times and added expenses for retailers. But despite these challenges, Salesforce said, retailers shouldn’t push shipping expenses onto consumers.

More than half of shoppers say they are more likely to purchase online than in a store if delivery is free, according to Salesforce. This is also in line with Digital Commerce 360 research.

Garf said retailers are getting more stringent about returns, as well. That has also led to retailers pushing buy online, pick up in store (BOPIS).

3. Shoppers embrace AI to search for the perfect gift

Salesforce said that artificial intelligence (AI) influenced 17% of online purchases during the 2023 holiday shopping season. Predictive and generative AI contributed to $199 million in online sales during the 2023 holiday shopping season, it said.

This year, Salesforce anticipates that more consumers will leverage AI, whether they know it or not. Already, 53% of shoppers Salesforce surveyed said they are interested in using generative AI for discovering gift ideas.

As Google embeds generative AI into its search tool, Salesforce said, retailers will be able to transition from keyword searches to natural prompts for finding products on their websites. Salesforce said it predicts search will drive a conversion rate nearly 3x better compared to traffic not engaged with site search. It also predicts a 1.8% conversion rate across all geographies and verticals in the 2024 holiday shopping season.

Salesforce announced AI, Data Cloud and Commerce Cloud features at its Connections 2024 conference at McCormick Place in Chicago on May 22 and 23.

4. Black Friday becomes Cyber Friday

Among the Salesforce predictions is that ecommerce will capture 7% of in-store sales on Black Friday.

Nearly two-thirds of shoppers Salesforce surveyed said they’re waiting until the Cyber 5 period to make large holiday purchases.

“The big news is that Black Friday is going to be the biggest day for digital,” Salesforce said.

Survey respondents cited convenience, free delivery and the ability to search for the best prices as their top reasons for going online. Additionally, 72% of surveyed consumers told Salesforce they prefer to shop online during Black Friday.

5. Retailers tap loyal shoppers to avoid skyrocketing digital marketing costs

Digital marketing costs are becoming more expensive as the United States prepares for another presidential election and Chinese companies buy more advertising inventory, Salesforce said.

“This means that brands and retailers have to better engage their existing customer base amid this tug of war over digital advertising space,” it said.

As a result, Salesforce said, shoppers are doubling down on loyalty programs. 63% of shoppers are making more purchases from stores where they can earn and redeem loyalty points, Salesforce said.

Salesforce Shopping Index data indicates that the rate of repeat buyers increased 8% over the last two years. Furthermore, 46% of shoppers say earning and redeeming loyalty points is the second-highest factor, behind price, influencing where they buy, according to Salesforce data.

The final Salesforce holiday prediction is that loyal, repeat buyers will make 40% of purchases in the 2024 holiday season.

“This season will be competitive, intense, and no doubt all about pricing and discounting strategies,” Salesforce said. “It’s never been more important to rely on your customer data for guidance and insight into marketing campaigns — especially the holiday promotional calendar — that keep your loyal customers buying more and buying from you.”

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EBay said it is notifying customers about the upcoming change. In the meantime, the company shared that it offers a “variety of popular, relevant, and secure payment options.”

EBay ranks No. 6 in Digital Commerce 360’s Global Online Marketplaces database. The database ranks the 100 largest such marketplaces by 2023 third-party GMV.

Of those 100 marketplaces, 12 (excluding eBay) do not accept American Express as a payment method. Furthermore, the change would make eBay the only U.S.-based marketplace to not offer American Express. The largest online marketplace not to accept it is JD.com Inc. London-based Etsy subsidiary Depop also does not offer it. JD.com is No. 4 in the Global Online Marketplaces database, and Depop is No. 54. Etsy ranks No. 20.

2024 Global Online Marketplaces Report

Analysis of the 100 leading global online marketplaces. Includes over 25 charts, rankings of the world’s Top 100 online marketplaces by 2024 third-party GMV, tips for marketplace sellers, marketplace trends, and findings from a new consumer survey.

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Why is eBay dropping American Express?

Starting Aug. 17, eBay plans to discontinue its acceptance of American Express. It cited worries over inflation and rising costs among consumers and small businesses as reasons. As a result, eBay said, there is a need for more regulations to increase competition among credit card networks and reduce transaction processing costs for both buyers and sellers.

The online marketplace also said a “vast majority” of its customers are willing to use alternative payment options.

“After careful consideration, eBay has decided to no longer accept American Express globally effective August 17 due to the unacceptably high fees American Express charges for processing credit card transactions,” eBay said in a press release. “At a time when payment processing costs should be declining because of technological advancements, investments in fraud capabilities and customer protections by merchants like eBay, credit card transaction fees continue to rise unabated because of a lack of meaningful competition.”

EBay is not the first major merchant to stop accepting American Express cards. Notably, Costco Wholesale Corp. ended its credit card partnership with American Express in 2016 after about 16 years. The move switched Costco over to Visa’s credit card network and replaced members’ co-branded credit cards with Citigroup-issue Visa cards.

Costco is one of 39 online retailers in the Top 2000 to not accept American Express cards as payment. The Top 2000 is Digital Commerce 360’s database of the largest online retailers in North America based on their annual web sales. Costco ranks No. 7 and is the largest Top 2000 retailer not to accept American Express.

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