Global eCommerce sales reached approximately 5.2 trillion U.S. dollars in 2021. This figure is growing by over 50% annually and is expected to be about 8.1 trillion dollars by 2026 (Statista).
Since this is a very competitive environment, it’s hard to stand out among so many other online stores that sell similar types of products. In order to achieve expected results with your online campaigns, you need to closely follow current and future trends and adjust your strategy accordingly.
In this article you can read about the state of the eCommerce market and the most important behaviors of online retailers in the recent time. All this comes from the Feed Marketing Report 2022 by DataFeedWatch, which is based on a study of 15,000 shops in more than 60 countries and 20+ eCommerce sectors.
1. The supply chain problems lessened but continue to affect retailers globally
The global covid-19 pandemic that started in 2021 had a huge impact on the state of eCommerce in 2022. In the first half of 2022, over 16% of advertised products across all catalogs were out of stock and therefore not available for sale.
It’s always worth checking the advertising policy for each channel you use. Some eCommerce platforms, such as Google Shopping, automatically stop running ads for items that are no longer in stock. This is beneficial for both advertisers and the specific platform: advertisers don’t lose money on outdated ads, and the platforms prevent bad shopping experiences.
However, not all platforms stop showing ads for products that are no longer in stock. Therefore, it is crucial to ensure that your product feed always contains up-to-date stock information to keep your ads relevant. You certainly don’t want your product campaign to generate paid clicks with no conversion potential.
Some countries handled the stock level disruptions better than others
US and most European markets were most affected by supply chain disruptions caused by the Covid-19 pandemic throughout the 2021. However, it appears that many of them came back into play in 2022 with above-average inventory levels.
In the first quarter of 2022, 85.61% of all products advertised in the US market were in stock. In Sweden, the Netherlands or Poland the percentage of advertised products availability was above 90%!
The markets still struggling with supply chain disruptions in the first half of 2022 were France with 39.40% unavailable products or Latam countries with an average of 34.96% products unavailable for purchase. The reasons for these poor results were possibly the spread of new variants of Covid-19 and the high inflation.
2. Discounts are being widely offered as an answer to the inflation-led slowdown
Customers love discounts and online retailers are happy to make them part of their strategy. On average, 26.49% of products advertised across paid advertising channels in the first half of 2022 were on sale.
The supply chain disruptions that began in 2021 and continued for some countries throughout the 2022 resulted in increased inflation, which in turn led to significant price increases. In fact, prices went up by 7.51% over the year from January 2021 to January 2022.
The current economic circumstances are making shoppers think twice about their buying choices. They are starting to consider cheaper alternatives to the products they usually buy.
This certainly has an impact on the way online retailers run their campaigns. If they choose to create and expand their discount strategy, they have to accept that in order to achieve a higher conversion potential, they have to deal with a lower profit margin.
Given the current market situation, it is expected that the popularity of the use of product discounts will increase.
As of 2022, the leading sector in discount implementation is Apparel & Accessories. 37% of product catalogs containing fashion items are offered at a promotional price. Health & Beauty and Furniture sectors also discount many of their products (33.12% and 32.77%).
Media is the business field that rarely puts products on sale, with 2.86%.
3. Search and Social are the dominant channels for almost every retailer
Multichannel strategy is widespread among online retailers and becoming more popular every year. Expanding to multiple channels means increased visibility, more potential buyers and more revenue streams.
Search and Social are two channel types that dominate eCommerce advertising.
91.55% of all online advertisers use Search channels to promote their products. 54.15% use Social channels.
The figure of almost 92% shouldn’t come as a surprise. Paid Search platforms are used by consumers who actively search for specific products with the aim of buying them. It’s a perfect channel type to find shoppers with a high purchase intent.
Almost 55% of advertisers using Social is not a bad result either. It shows that e-retailers see Social channels as a relevant channel to promote and sell their products. It may not generate as much revenue as Search (e.g. Google Shopping), but it is still an important source of revenue. It’s worth considering Social as an advertising medium. According to Statista, social commerce sales in the U.S. are expected to reach 992 billion dollars in 2022 and 2.9 trillion dollars by 2026.
On average, 44.18% of advertisers use product ads on both Google and Facebook. This is not without reason, as these two channels can safely be considered as complementary. While Google is a source of end-of-the-funnel conversions, Facebook is very useful for increasing brand awareness and generating impulse purchases.
Only 10.94% of eCommerce advertisers use affiliate platforms, such as Criteo or Awin to promote their products. This might just be a mistake as this low figure doesn’t mean a low value of this type of channel. In fact, affiliate marketing drives 16% of eCommerce sales in countries like the US and Canada.
Still not convinced?
In Google Trends we can see a constant growth in interest in affiliate marketing over the last 5 years.
4. Most retailers see the need for adjusting the product set depending on the channel they advertise on
55.84% of sellers who advertise on both Google and Facebook choose a different product set for each of these channels. This is indicated by a different number of products included in the Google feed and Facebook feed submitted by the same eCommerce advertiser.
Different factors should be considered when revising the right product set for each individual platform. To drive the best possible results from a campaign on each platform, you should optimize your data feed after considering the following:
- the advertising goal
- target audience intent
- the visual build of the ad (such as title or image)
5. Data feed tactics are being used by most eCommerce marketers in pursuit of higher ROI from paid channels
Ad managers and online marketers often have to deal with incomplete and unoptimized product data. Original data passed from eCommerce stores often misses some important information or contains data that is inadequate for the purposes of a specific PPC campaign. The solution to this problem is to optimize the most important attributes in the data feed.
20% of online retailers make big changes to product attributes before submitting the final product feed to the ad platform.
The product attribute that is most commonly optimized by marketers in a data feed is product title. 13.58% of all online retailers that overwrite data from their stores, make in-depth changes to this attribute.
Product titles can be optimized by rewriting them from scratch or replacing multiple words they contain to better match the keywords or phrases consumers type in.
When optimized, they have a huge positive impact on key campaign metrics:
- Conversion rate
Maybe remove some products?
A very good tactic to help improve campaign performance is to implement a product exclusion strategy.
64.74% of eCommerce marketers exclude some products from their feeds. The most common factor for excluding them is price. 15.79% of advertisers use this attribute to filter some items out of their feeds.
There can be a couple of reasons for excluding certain items from campaigns.
- Price – product’s price goes below a certain threshold.
- Titles – some product types don’t sell well (e.g. in a specific season).
- Images/links – missing/ incorrect data
- Availability – low inventory levels.
- ID – single products don’t perform well.
By excluding underperforming products or groups of products, you can increase your campaign’s ROI.
Now you know 5 very important eCommerce trends that occurred in 2022 and will continue to evolve in 2023. This knowledge can help you when preparing your advertising strategy for next year, including where to advertise what products and what tactics to use to become successful.
Jacques van der Wilt is a leader in the feed marketing industry and an entrepreneur. He founded DataFeedWatch (acquired by Cart.com) – one of the largest feed management companies in the world, that helps online merchants optimize their product listings on more than 2000 shopping channels in over 60 countries.
Prior to that, Jacques has held leadership positions in both the US and Europe. He is also a seasoned guest speaker at industry events and mentor at Startup Bootcamp.