retail.tea.leaves: One Million Million Dollars

Welcome to retail.tea.leaves for week 5 of 2023, a companion newsletter to my broader?marketing and trends newsletter. Let's get into it.

Ecomm Gets Trill

Ecommerce had a trillion dollar year last year, thanks in large part to mobile. Computers are still where most of the action happens, but mobile’s share of total revenue is nearing 40%. And I imagine its growth is only just beginning.

Valentine’s Day

Headline: Americans intend to spend $25.9B on Valentine’s Day this year, compared to $23.9B last year. (headline quoted here is from The Hustle because it was better).

Survey says: the big spenders will be Millennials, who plan to spend an average of $336.

If this is your kind of thing, Microsoft has 5 insights for your campaigns.

Don’t be surprised if consumers are saving non-V Day purchases for President’s Day as deal seeking and affordability are still the name of the game for shoppers.

Earnings Season

It’s everyone’s favorite time of year, tech earnings report season. These are a little more fraught this year due to tech’s recent implosion and the lingering question on everyone’s mind: recession?

Here are the quick hits (to be expanded upon the next Spottting Rabbbits):

• Snap kicked things off be exceeding expectations for user and revenue growth, but revenue per user dropped (along with confidence in the messaging app, apparently)
• Meta missed estimates but gained the hearts of Wall Street with a 20% stock jump. Unlike The Ghost, confidence is high for Zuck+Co. (Thanks AI!)
• Speaking of AI, Google (/Alphabet (& YouTube)) sang that tune over a backbeat of declining ad revenue. For the time being, the Great Algorithmic Hope is being tempered by the regulators at the door.
• Microsoft missed estimates with growth slowing across the board and the recent layoffs, but it’ll be OpenAI to the rescue, right?
• Pinterest painted a rosy picture with growth in users and revenue, but it couldn't help the inspiration platform avoid a round of layoffs.
• Apple missed the mark on revenue but blamed China and the resulting supply chain woes, which is why they keep splintering it across Asia and India.
• Amazon took one on the chin, posting its worst annual loss on record. A big part was some creative accounting to write off losses on Rivian and costs associated with layoffs. Even Amazon Web Services may not be able to save their fortunes. This could mean more ads and a tighter squeeze on merchants to find revenue wherever The Everything Store can.

Overall, it wasn’t as bleak as the infamous earnings szn headlined by Snap that started the slide. The year ahead may come down to which sentiment wins out: The Great Algorithmic Hope vs. Animal Spirits & Recession?

Do It Live

Modern Retail has a piece up on how a DTC brand is using QVC (yes, it still exists!) to grow its audience. The approach could prove useful on other livestream shopping platforms, or really just content in general.

The episodes themselves follow QVC’s The Total Experience format rather than a direct selling approach and are up to about three minutes long. The format allows Agrawal to share more of her background, the brand’s story and the community behind the brand Sonder Club. For example, in one episode, Agrawal explained how customers can connect with Silk + Sonder users and gain access to Sonder Socials, which are special events and classes led by the company’s trained facilitators

consumers also aren’t as easily influenced to buy items just based on static images. “We’re smarter than that now,” she said. “We want to see things in action. We don’t necessarily want to get in our car and drive to the store but we want the next best thing.”

And then there’s this:

According to a 2021 McKinsey report, livestream shopping generates conversion rates approaching 30% — up to 10 times higher than conventional e-commerce.

Just The Headlines

From Amazon to tech startups, e-commerce takes on the TikTok-style feed

Can I have my PayPal balance automatically transfered to my bank? [Yes!] (I’m including this one because PayPal can freeze your funds for any reason they feel like or their algorithms hallucinate, so if you use it you should know this.)

Thanks for reading! If you learned something and want more, think about subscribing and/or check out the other stuff I write.

-Kyle