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Trade, Plan, Pause Engage - H2 2022 - from survival to getting ahead

The move to Shopping through eCommerce is a shift not a trend - but what is the state of play

Right now, most commentary is taking a few routes:

  • Quick commerce and its failure

  • How to cut budgets and improve performance

  • The new normal for ecommerce - growth is based on 2019 nothing more

  • Amazon’s new boss

All very interesting and noteworthy - but shifts are always worthy of our time. In a recent report from eMarketer and Insider Intelligence they start out telling us that the habits of the last 2 years have “taken root” (a shift, not a trend). Growth is good but slowing, but, ecommerce sales will top $1T this year with MCommerce taking over $416B of that.

We know from the report that 238M people are now browsing, researching products with 90% of this group making a least 1 digital purchase during the year 2022. Mobile purchasers will account for 70% of that buying population by 2026 - think of design and process going forward. Amazon is taking up almost 38% of this sales pie. The other top 9 make up only 24%.

DTC - Losing Ground?

In the US, direct-to-consumer (D2C) ecommerce sales for established brands will reach $117.47 billion this year, more than three times larger than those of digitally native brands. Established brands are also now growing faster than digital natives—22.6% versus 17.5%—as leading brands, like Nike, prune retail distribution partners to drive more sales to their owned and operated channels.

Why? Not commented

Established brands have better, broader distribution. Also, there is a shift not mentioned, established brands are hiring better. They are hiring stronger, more experienced teams who are driving change. The pandemic sped up some of these hiring needs.

So what for the year ahead? Trade - trade and trade harder

Amazon quarterly sales, change from prior year

Physical stores Yellow

Total sales Blue

Amazon will aggregate the best in market deals out there - it needs to after previously poor sales events. Poor product selection among man y criticisms leveled at the platform. “Amazon is very much wanting to prove the value of that Prime subscription, so I do think we’ll see some really good deals on necessities, such as toilet paper, paper towels, toothpaste, deodorant and laundry detergent,” she said. (Casey Runyan)

Think you are struggling with sell through?

Expect to find the best discounts on instant pots, fitness trackers and Amazon devices like the Kindle, Fire TV streamer and even their private-label clothing, Ramhold said. Already, Amazon is advertising a 24-inch Fire TV for only $90, nearly half off the retail price. Other early deals include up to 55% off the second-generation Echo Show, Kindle Paperwhite and Eero Mesh Wi-Fi routers.

Making tech Sweat

“Price trackers are the easiest way to monitor just how good a deal really is, especially for big-ticket items,” she said.

Also, ask Alexa for help. Amazon has been known to offer shoppers exclusive deals, or early access, if they shop via an Echo device,” McGrath said.

What for Christmas? Black Friday?

We expect 2022 holiday retail sales to increase 3.3% to $1.262 trillion, with brick-and-mortar increasing 0.9% to $1.026 trillion and ecommerce climbing 15.5% to $235.86 billion. For the retailer margins will be razor thin, so volume may well be the lever to watch. Inflation, supply chain instability, and rising digital ad costs are likely to hit retailers’ bottom lines.

What for my first love, Marketplaces?

Despite slowing growth, US marketplace ecommerce sales are expected to hit $357.26 billion in 2022, making up 34.6% of all online sales. After a nearly 45% growth during the pandemic in 2020, US marketplace ecommerce sales only grew 16.7% in 2021, and that growth will continue to decelerate to 14.8% this year. Sales will continue to decline through 2024, though it will be a much smaller drop

So what do we do with all of this? My 2 cents - Get your trading calendar sorted for the rest of the year.

Feeling overwhelmed yet? Not sure where to start?

Break it down, eat the elephant one leg at a time. Start here. Check out my week 3 lesson from our Skool programme - Part 1 in a 3 part series of building effective trade plans for ecommerce. This will get you started - weeks 4 and 5 will square this circle for you.

Next Steps: The role of stores is evolving and even more critical to consumer experience

Retail store counts continue to grow with the industry and the broader economy, despite the growing share of ecommerce. In fact, the role of the store is evolving to support buying across all channels.

Start your retail planning for next year think - retail sales not online v offline.

All shopping is retail Online, in-store and everything in between

Successful retailers are reimagining their offerings to meet consumers both online and in-store, creating an integrated experience that blends channels. Retailers are driving this transformation through innovative thinking and smart investments that improve the customer experience regardless of how they want to shop.

Right now is about trade and survival - get that nailed and then get planning for the beyond. We cannot sleep one eye closed and forget the open one still needs to work for us. It is easy to get complacent, overwhelmed or indifferent. Let’s control our controllables.



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