The COVID-fueled e-commerce party couldn’t last forever. Businesses knew that it was only a matter of time before consumers reverted to their pre-pandemic shopping habits of mixing online and in-person shopping. That time appears to be upon us.
A recently released Mastercard SpendingPulse report showed a year-over-year (YoY) retail sales increase of 7.2 percent in April. However, within this figure, we see that in-store sales increased 10 percent while e-commerce declined by nearly 2 percent.
Amazon.com, Wayfair, and Target all reported slowdowns in their e-commerce business in Q1. Amazon saw online sales decline by 3 percent, and Wayfair reported fewer active customers. While Target’s digital comps were up 3.2 percent, that was down from the pandemic-driven 50.2 percent increase in 2021.
If the slowdown of e-commerce wasn’t enough, customer acquisition and retargeting costs continue to increase. Business Insider reported YoY ad cost increases for Google, Meta (Facebook), TikTok, and Amazon sponsored products.
While retail is still strong overall, inflation’s impact on consumer spending combined with the return to in-store shopping means e-commerce businesses are left fighting for a bigger piece of a smaller, crowded, and uncertain pie. Throw rising acquisition and retargeting costs into this mix, and you have yourself a not-so-favorable recipe.
Luckily for e-commerce brands, there are ways they can adapt their marketing efforts to these market conditions to increase customer retention, reduce paid media costs, and increase profit.
Focus on Intent-Based Marketing
When it comes to marketing, sending messages that are highly relevant to the current state of a customer’s journey leads to sales, especially with opt-in channels like email and SMS. With an average conversion rate of 1.9 percent (compare this to paid media), behavior-based automated emails accomplish this. They generate nearly 30 percent of all email orders while accounting for only 2 percent of the sends.
The reason: they’re driven by consumer intent.