Down?
It feels harder. It feels worse. But it’s, actually, still, better.
It’s earnings season in the run up to Holiday, and the messages don’t sound all that great.
Amazon said Q4 is going to be pretty rocky for them, Facebook said it’s average revenue per user is the lowest it’s been in two years, and Google’s ad revenue only grew 2.5% in Q3 (with YouTube declining).
Given these three (and Apple) are the main gatekeepers for the flow of ecommerce, you’d might think the outlook is bleak.
For Holiday, it probably is.
But if you zoom out a bit more, there are some perspective-setting stats. The US Census bureau’s retail estimates for the third quarter (excluding the normal auto, gas, etc) show spending is up 8% (unadjusted) over Q3 2021. Shopify, meanwhile, reported GMV growth of 11% YoY and Amazon’s North America segment reported growth of 20% YoY.
So, consumers are still shifting to ecomm.
This isn’t, really, new information. But it is important to remind ourselves that ecomm is, globally, a growing market. The challenge, of course, is overcoming the hurdles associated with growing.
In direct-to-consumer businesses, those hurdles are largely associated with the gatekeepers mentioned above. And make no mistake: as consumers throttle spending even more, these hurdles will get harder.
And everything will feel worse.
None of us, really, are likely to forget what two years of an unprecedented surge of ecomm felt like. We will probably always benchmark against that, at least in some ways (or subconsciously).
But the macro is an advantage still, even as the market gets more challenging. So, winning means finding the right execution. Because the growth is still there.