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  • Writer's pictureRick Kenney

Insights Retro - 2023 Q3 - Commerce in transition

Sunsets here on the east coast are already beating 7pm local time, and summer officially concludes across the Northern Hemisphere this Friday.

June, July, and August serve as the reward and break for the toil of the other 9 months, but also a transition period between the prior school and work year and the next.

This past summer quarter gave us a ton to chew on - growth took a breath, consumers fell under ‘ad-ssault’ and we're still waiting for relevance to go beyond the well-trodden triggered playbook. Here’s this quarter’s insights retro:

Growth is taking a moment to catch its breath

It is hard to look past 0% growth. Harder still: the resultant nausea associated with 5 consecutive quarters of same-site-sales that haven’t nudged out of a tight range of -1% to +1%. This quarter’s 3% lift in traffic is a good consolation, and it hints at a UX opportunity across commerce.

One place to look: across the journey, there are a few really interesting moments that may provide the opportunity to shift that UX and find conversion -- take a closer look at search and carts.

Let's be clear -- and a handful of retail voices echo this sentiment: the ‘show up and grow up’ days of digital are over. We've reached the phase where there is real separation between leaders and laggards - and you outta know by now which group you are in.

Consumers are under ad-ssault

Acquisition *costs* and, digital ads play a starring role in most brands’ acquisition strategy.

In 2021 and into 2022, digital ads made for fatal attraction, as acquisition costs soared during the mid- and tail-end of the (at the time) digital-only retailing world.

As shopping re-seeded, runaway rates receded - BUT... total ad spend generally continues to grow, YoY.

Don't blame CPMs, rather, it is impressions (or clicks) that are pecking at ad budgets. Put less kindly, ad-stuffing is pick-pocketing brand budgets.

Impressions on Instagram ratched up 84% in Q2 over the past year. And, consumers are noticing; 44% of Instagram users claim they are seeing more ads (per Insider Intelligence). In context, time spent on social media is up about 3% (per Statista). That means that ad impression growth is 16x’ing that of time spent.

This isn’t a ‘how to stand out in a crowded house’ post. It is a call to action – for brands to recognize that the walled garden has been plastered with billboards (and that’s not even counting the organic brand posts in a user’s feed, too).

This reality - ad-stuffing - means that the slices of consumer attention that brands are fighting for are turning to crumbs.

The Underappreciation of relevance

There are lots of similarities between the golden days of email’s rise (2000’s), and what we’re seeing now with SMS. Early shopper adoption drove commercial success, which led to a burgeoning clump of providers. The mixture of greater program demand and revenue expectations helped drive per message costs down (remember, market rates for SMS were still 2-3 cents as recently as 2020), which has led us to the next step in SMS’ evolution.


SMS may have found its way to relevance faster than email did. The higher per message costs, and greater intrusions meant that many brands began with triggered messages as a proof of concept for the channel.

And just like email, the performance of those triggered messages (flows for the Shopify-era crowd) far outpaces the batch 'n blasted.

The usual suspects - abandoned browse ($2.28 RPM), carts ($9.22), and checkouts ($5.33), along with welcome messages ($4.80)- see an order of magnitude better productivity than broadcast campaigns (and of course audience sizes are tiny, comparatively).

So, our job, as marketers, is to find more moments of engagement AND to bring this same relevance-first thinking to those broadcast campaigns.

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