by Mara Greenwald
Source: www.mediapost.com, July 2023
The retail media surge continues, growing 9.9% to reach $125.7 billion in 2023 — and forecast to exceed TV revenue globally in 2028, according to GroupM’s latest global forecast. So there will be more competition than ever in the ecommerce media space. To win, we have to understand and adapt to trends quicker than ever before.
There are now three particularly surprising trends in ecommerce — with implications for marketers everywhere.
Buy Now, Pay Later Surges in Grocery
The fact that Buy Now Pay Later (BNPL) is growing isn’t surprising. However, the area where growth is surging is surprising: grocery. We expected and saw growth in BNPL for holiday shopping, electronics, and home, because those tend to be big-ticket items. Now, we’re seeing it in grocery, and that growth is outpacing every other vertical. According to Grocery Dive, BNPL in grocery grew 40% over the first two months of 2023. In the same period, BNPL in home only grew 8%.
Why the surge? First, we already saw BNPL rise over 2021 and 2022 in smaller ticket items and basket building. Second, inflation and economic uncertainty fuels consumer flexibility in payment options — and that helps retailers close the cart. BNPL growth could also drive more consumers into e-grocery, an area where the price of delivery convenience has been unattainable to some consumers.
For marketers, focus on adding value for stocking up or cross-category buying. For example, if they’re buying deodorant, incentive them with value on body wash too. And think about e-grocery partnerships for cart building, by delivering savings or shipping value.
Resale Growth is Outpacing Retail Growth
According to eMarketer, resale volume is projected to grow 7.6%, while retail volume is only projected to grow 3.3% in 2023. We’re starting to see a major inflection point for consumers focusing their dollars increasingly on more affordable, more sustainable options.
According to Morning Consult, among the top reasons people shop for used goods, 76% cite looking for unique items and 63% cite sustainability. In the age of fast fashion, consumers are increasingly aware of the challenges with mass produced cheap goods; many are starting to focus on sustainability and uniqueness.
While such players as eBay and Poshmark are large drivers of resale, surprisingly, major retailers are also getting into the game. Amazon has been testing partnerships with Rent the Runway, while Walmart partnered with thredUP.
For marketers, a sustainability strategy is no longer a nice-to-have but a need-to-have. Consumers are paying attention and speaking with their dollars.
D2C Starts a New Direction
We saw a steady rise in D2C for the past decade, with companies like Warby Parker recently moving to expanding to their own storefronts. However, the pandemic, supply chain, and increased competition have made the last couple years increasingly challenging for D2C.
In order to continue growing, many D2Cs are starting to turn to wholesale.
This is surprising, since it goes against the D2C model. However, wholesale is the logical next step to evolve. Integrating into existing retail shopping trips helps D2C brands move a high volume of product where it could have previously relied on a subscription model.
For example, Fly By Jing operated fully as a D2C for the first four years of its operations, and now wholesale is responsible for half of its business. The D2C component isn’t going away, but rather expanding to continue growth in an increasingly omnichannel shopper environment.
There’s no question that 2023 is another pivotal year for ecommerce, as were years prior. As we move through the final half of the year, the bottom line is to be prepared for and expect the unexpected. The only constant in ecommerce is change.
