Ecommerce & Marketplaces Newsletter – Dec 15th, 2023
This week’s lead story focuses on Cyberweek 2023’s Key Takeaways for online marketplaces. The results for Cyber Week 2023 have exceeded expectations, with data from Adobe Analytics indicating that it generated approximately $38 billion in sales, marking a 7.8% increase from the previous year. Cyber Monday saw total spending of $12.4 billion, a 9.6% year-over-year increase, making November 27, 2023, the most significant online shopping day in history. Retail Technology Innovation Hub reports that online marketplaces are increasingly the dominant method that consumers use to purchase products, representing close to 60% of all e-commerce spending globally and transacting close to $4.1 trillion in annual gross merchandise value (GMV) in 2022, growing by $1.7 trillion since 2019. Mirakl has some insights on how to grow your business online next year. Mirakl spoke with leading eCommerce tech experts to get their take on the 2024 eCommerce trends that will drive the growth of online platforms in the year to come. Retail media is projected to reach $176 billion by 2028, surpassing advertising spend on TV. Subscription-based online markets have emerged as powerful instruments reshaping the dynamics of business-customer interactions. Their vast potential encompasses everything from grasping the subscription model to effectively generating revenue through these digital platforms. Communication Square article highlights the powers of subscription-based online marketplaces. Marketplacer anticipates that retailers with an online marketplace will outperform those without one during the Q4 holiday retail season. This period is often deemed a critical juncture, as it significantly influences year-end financial figures for major retailers and establishes a foundation for the upcoming year. Alibaba, the prominent Chinese technology company, is intensifying its commitment to artificial intelligence to drive the expansion of its e-commerce sector. This move follows an internal memo by founder Jack Ma, who stated that the era of AI-driven e-commerce is in its early stages. Read this and other great stories in this week’s edition.
Notable news from the past week
Key Takeaways From Cyber Week 2023
The results for Cyber Week 2023 have exceeded expectations, with data from Adobe Analytics indicating that it generated approximately $38 billion in sales, marking a 7.8% increase from the previous year. Notably, Cyber Monday saw a total spending of $12.4 billion, a 9.6% year-over-year increase, making November 27, 2023, the largest online shopping day in history. At the outset of the 2023 holiday shopping season, there was considerable uncertainty due to changing consumer spending patterns and rising costs in various aspects of life. However, the record-breaking online sales during Cyber Week underscore the significant influence of discounts on consumer demand. Black Friday traditionally kicks off the holiday shopping season, with numerous success stories of customers who thrived during Cyber Week, particularly from the Monday preceding Black Friday through to Cyber Monday.
Shoppers Crown Online Marketplace As King, Now Representing Over 60% Of Global Ecommerce Spend
Online marketplaces are increasingly the dominant method that consumers use to purchase products, representing close to 60% of all e-commerce spend globally and transacting close to $4.1 trillion in annual gross merchandise value (GMV) in 2022, growing by $1.7 trillion since 2019. New analysis by OC&C Strategy Consultants on digital spending found that specialist models (including vertical focused, secondhand and hyper-local models) have been a major driver of this growth, capturing business by targeting specific customer needs that generalist marketplaces have been unable to meet. The findings were based on analysis of the top 250 digital marketplaces around the world by gross merchandise value (GMV) to understand the nature of these marketplaces and their evolution.
Propelled by unpredictable changes in the market, increasing buyer demand, and technological innovation, the eCommerce sector is under constant pressure to evolve. While online sales are predicted to grow, so are the expectations of buyers. Companies are up against even tougher competition to attract customers online and convert sales. We spoke with leading eCommerce tech experts to get their take on the 2024 eCommerce trends that will drive the growth of online platforms in the year to come. Retail media is projected to reach $176 billion by 2028, surpassing advertising spend on TV. By enabling retailers to monetize their site traffic through sponsored ads, retail media enables retailers to unlock new revenue sources with margins of up to 70-90%. In 2024, retail media will continue to provide both brands and marketplace sellers with unparalleled access and visibility to relevant audiences. Marketplaces in particular will play a large role in the expansion of retail media as third-party sellers are keen on increasing the discoverability of their products and reaching new customers through retail media platforms offering measurable results.
The Power Of Subscription-Based Online Marketplaces
Online markets that need subscriptions have become very potent tools that are changing how companies interact with their customers. Their potential is immense, ranging from comprehending the subscription model to creating and making money from these markets. This investigation delves into the essential elements that propel prosperity and offers suggestions for fully utilizing subscription-based Internet marketplaces. Customers who use a subscription model for their company pay a set amount on a regular basis in exchange for access to a product or service. Customers will continue to pay you for your services as long as they perceive the value your business offers them, which is why the subscription revenue model allows you to take advantage of the compounding value of client relationships.
Marketplacer, a global technology platform that enables brands, retailers, suppliers, communities and innovators to build and grow successful online marketplaces at scale, is predicting that those retailers with an online marketplace will best those without during the Q4 holiday retail season. Considered a “do-or-die” season, the holiday retail period punctuates end-of-year numbers for major retailers and sets the stage for the upcoming year. “The holiday retail season is upon us — and what we see are those retailers that have implemented a strategic approach — and implemented an online marketplace — are poised to capitalize in the fourth quarter,” said Richard Hankin, senior vice president for Marketplacer in North America. Added Hankin, “A recent report from Marketplacer and RetailX showed that globally, thirty five percent of online purchases are made on marketplaces.
Each year, DeliveryX starts to look ahead to the coming new year in a series of predictions. Simon Jones, sales executive at Exotec has outlined his warehouse automation trends for 2024. The warehouse automation market is expected to continue to grow by around 15% annually between now and 2027. As we look ahead to 2024, there are a number of trends that will not only drive this growth but also determine the direction in which the sector is evolving. Third-party logistic companies (3PLs) play a major role in the UK logistics sector; particularly in ecommerce fulfilment and retail replenishment. In the past, if they have used warehouse automation for a contract, it has usually been owned by their customer, and often the building is too.
Chinese tech giant Alibaba is doubling down on artificial intelligence to spur the growth of its e-commerce division, after founder Jack Ma wrote an internal memo saying the era of AI e-commerce “has just begun.” The company’s domestic and international retail businesses are testing multiple AI-driven tools and are on a hiring spree for AI-related roles, according to local outlet LatePost. Why it matters: Alibaba hopes that by integrating generative AI into its core e-commerce business, it will further boost sales in the highly lucrative sector and create new forms of customer experience to up business retention rates. Details: Taobao and Tmall Group have channeled their AI focus into four key areas: marketing platform Alimama, customer apps, merchant apps, and industry-specific apps. Before the reorganization led by Alibaba’s chief technology officer Wu Zeming, there were around 20 teams within the group exploring AI-related businesses, the report said.
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