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Failing Flat

Growth rates have become boring


eCommerce growth is boring.

For 5 straight quarters, YoY growth took a binary shape, where change can be measured with either a 1 or a 0.

This comes at a time when digital - depending on who you listen to - accounts for between 15-20% of retail sales. Influence of digital is of course far greater. 

While digital has never been so important, it’s also never been so impotent. 

A paltry 3% lift in traffic pins digital growth. Traffic has - and will continue - to oxygenate retail growth. More clicks, taps, and footfall makes more money. Without it, our headline strategy starts with an O: Optimization <shudders>.

Before I get carried away – Optimization should be celebrated. It is - by definition - making the most of what you have. It can lead to real GMV lift, typically through conversion gains. It is a difference maker. Though, imho - it’s not a *change* maker. 

Optimization is naturally regulated by … what you have.

And, lately, we’ve not had much (more). So, we can’t grow much more. 

So, what’s holding traffic down? Weak spending? Tough comps? Amazon?

Let’s look back …

Over the past 2 digital decades, we’ve enjoyed plenty of market milestones:

2020: Pandemic-induced Digital and Omnichannel acceleration

2016: Instagram ad ubiquity (reach 500k advertisers)

2015 Apple Pay 2015 (later, Shop Pay 2017)

2015: DTC Drop era (notably Yeezy’s)

2010-14: Rise of the eComm Apps: Demandware LINK, Shopify App store

2008-11: Private Sales and Box Model: Groupon, Trunk Club, Stitch Fix

2007: iPhone 

2005: Amazon Prime

2002: Amazon Super Saver Shipping

While 2002-2011 was dominated by traffic driving innovations in the market, the last ten years or so has been tilted towards on-site optimization. 

In a clear sign of maturity, we’ve become enamored with tweaks and turns in the tech stack to drive a few points of growth. And, of course, there have been massive operational improvements in that time. It is far easier today to spin up a commerce site and stack that oozes best practices, than it was in 2011. 

But, over the last few innings, the bigger swings with potential home-run power - Crypto/NFT, Social Commerce - have missed the shopper. 

And we’re paying for it now. 

There's one big and notably absent innovation from the above chronology: 

AI’s acceleration. 

Why?: The impact of AI on commerce during the first 11 months of the ChatGPT era has been focused, primarily, on … Optimization. 

The traffic and growth slump of commerce needs a channel changer that doesn’t simply optimize the site journey, but manufactures more of them. 

Don’t stop optimizing, but if that’s all we’re doing, there's a clear path to mediocrity.

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