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The months leading up to and during the holiday shopping season are rife with predictions—we’ve provided plenty here at Retail Brew. But it’s worth taking a look back to see how those predictions turned out, and for the most part, they were pretty accurate. But there were some interesting things to take note of.
From Nov. 1 through Dec. 24, holiday retail sales, both in-store and online, were up 7.6% YoY, according to Mastercard Spending Pulse data. Discounting was also slightly more common last year as retailers knew price-sensitive shoppers would shy away from massive purchases.
- The median order discount percentage for November and December 2022 was up by 2.3% YoY from 20.75% to 21.23%, which shows that despite increased costs, brands were still eager to pass along savings to shoppers, Mike Grillo, VP of marketing at Ampla Technologies, told Retail Brew.
- In that same period, total revenue for brands under Ampla’s portfolio for at least two shopping seasons were up 18.24% YoY. Plus, non-inflationary growth can be seen by looking at total holiday season orders increasing 22.50%.
“One thing that helped them is less of a reliance on performance media. So if you could save dollars by marketing to existing customers, you can pass along a deeper discount,” Grillo said. “It’s all about the brands making choices this year—what levers can they pull to continue to meet those consumer expectations without eroding their margin too heavily.”
Switch it up: The holiday shopping season was emblematic of a longer-term trend in the industry, whereby merchants are diversifying their channels in order to reach more customers, Grillo said. He added that he believes this is a good thing as it’s cheaper to find customers through new channels.
- Across food, beverage, and wellness, Ampla saw a YoY decrease in Shopify revenue as a total percentage of revenue: Food, 12.57% → 9.58%; Beverage (nonalcoholic), 16.30% → 14.70%; Wellness, 33.35% → 28.80%.
“There were brands that would do 100% of their revenue on Shopify—weren’t even on an Amazon Marketplace—are now thinking, ‘I need to diversify my revenue in as many places as possible,’” Grillo said. “While we are still seeing total revenue growth across the portfolio, the concentration of revenue that’s just focused on Shopify has declined.”
+1: Online sales grew 10.6% compared to the same period last year, per Mastercard, as e-commerce accounted for 21.6% of total retail sales, up from 20.9% in 2021 and 20.6% in 2020.