Coffee & Commerce Newsletter: Edition #5 ?

Good afternoon,

Here’s the headlines for this week: 19 July 2024

CONSUMERS

?? DHL eCommerce UK: Consumer demand for flexibility is growing

• Consumer shipments with redirections in transit account for 35%, indicating a significant demand for flexibility in delivery options.
• Parcel collection points like DHL ServicePoints and lockers are increasingly preferred, especially during peak online shopping periods, showing up to 50% growth in popularity.
• UK consumers show a high preference for redirecting deliveries to neighbours and opting for 'do not disturb' options, reflecting a growing need for convenient and secure delivery solutions.

ECOMMERCE

?? Amazon's Prime Day event in 2024 drove $7.2 billion in sales within the first 24 hours, marking the largest ecommerce spending day of the year.

• The "Prime Day effect" influenced a significant increase in online shopping across various categories, with electronics leading at 33% growth compared to average daily sales in June.
• The event also created a "halo effect," boosting online sales growth by 3% in North America for retailers beyond Amazon, according to Salesforce data.

?? Falling online prices in June drive continued eCommerce growth

• eCommerce sales in June 2024 increased by 8% year-over-year, driven by strong performance in grocery and general merchandise categories.
• Signifyd's Ecommerce Consumer Price Index dropped by 1.14% compared to June 2023, reflecting significant reductions in prices across high-volume categories like apparel and general merchandise.
• Overall, lower online prices contributed to increased sales, particularly notable in categories like general merchandise (+30%) and apparel (+8%), despite varied price movements across different retail sectors.

???? US online retail sales to reach $1.2 trillion this year: report

• U.S. online retail sales are projected to grow by 9.8% to $1.2 trillion in 2024, making up 22.7% of the overall retail market, according to FTI Consulting.
• E-commerce growth is maturing, with annual growth expected to remain in the high- to mid-single digits, a decrease from the pre-pandemic mid-teen growth rate.
• The retail industry is adapting to this shift by integrating omnichannel strategies, using AI, and transforming stores into fulfilment centres to maintain competitiveness.

TECH

?? Amazon rolls out generative AI shopping tool Rufus to all US customers

• Available in the Amazon Shopping app, Rufus enables users to view orders, get product updates, compare items, and review product details.
• The tool aims to enhance the customer experience, having already answered “tens of millions of questions” from users.
• The introduction of Rufus follows a trend among major retailers, such as Target and Walmart, who are also integrating generative AI tools to improve the shopping experience, with consumer surveys indicating a positive impact on online shopping.

?? Wix adds new features allowing merchants to customise checkout forms , adding custom fields, adjusting field settings, and controlling field visibility.

• These capabilities enhance the checkout experience by allowing merchants to tailor forms to collect necessary information, preview changes, and reflect buyer data across the platform's emails and pages.
• The updates follow recent enhancements for developers, aimed at improving app development and monetization, and are part of Wix's ongoing efforts to expand its no-code and low-code platform.

?? Walmart builds wide lead among US retail media networks, report finds

• Walmart leads U.S. retail media networks with 11 billion impressions in Q1 2024, outpacing Target, Chewy, The Home Depot, and Kroger.
• Walmart Connect's success is bolstered by data-sharing partnerships and a strong ad-tech infrastructure, delivering high impressions both onsite and offsite.
• Specialized retailers like Chewy and Sephora also achieved significant scale, with over 1 billion impressions in Q1, highlighting growth in niche retail media networks.

MARKETING

?? Influencer marketing set to soar, reaching $199.6 billion by 2032

RETAILERS

?? Private brands hit record?highs in unit and dollar share in first half of 2024 , with a unit market share of 23% and a dollar market share of 20%.

• Private brands saw greater growth than national brands, with a 2.5% increase in unit sales and a 2.3% increase in dollar sales, compared to national brands' 1.1% increase in dollar sales and a 0.8% decrease in unit sales.
• Nearly all product departments tracked showed dollar sales gains, with significant increases in beauty, liquor, and general food. Surveys indicate that nearly half of grocery shoppers plan to buy more private brands, suggesting continued momentum for private labels.

?? Amazon sellers were penalized after the company's pricing algorithms found their items were being sold for less on Target's online marketplace.

• Target ran a competing discount event, which ends Saturday, in the lead-up to Amazon's Prime Day next week.
• Amazon's pricing algorithms have been the focus of an FTC lawsuit.

?? Costco is raising its annual membership fees for the first time since 2017 , with a $5 increase for basic memberships and a $10 increase for higher-tier executive memberships in the U.S. and Canada.

• The fee hike affects about 52 million memberships and is crucial for Costco to maintain low merchandise prices and compete with rivals like Sam’s Club and BJ’s Wholesale.
• Despite delaying the increase due to high inflation, Costco's shares rose by 2% in extended trading following the announcement.

See you next week,

The ChannelSight Team