Q2 2024 Saw Retail Ecommerce Revenues Rise by 7.2% Amidst Falling Prices and Shrinking Gross Margins
Even amid a period of economic uncertainty and rising costs, brands continue to increase online ad spend, which grew by 10.1% going into Prime Day 2024
CommerceIQ, the leading retail ecommerce management (“REM”) platform, released its State of Retail Ecommerce Report for Q2 2024, which saw retail ecommerce ordered revenue grow 7.2% for the second quarter of 2024 as compared to Q2 2023. This growth occurred in spite of falling price levels, with consumers purchasing more items at lower prices.
The report also showed growth in ad spend of 10.1% versus Q2 2023, suggesting that brands are continuing to prioritize growth and market share in the face of profitability challenges.
Among other findings in the State of Retail Ecommerce Report for Q2 2024:
- All categories other than Office Products experienced revenue growth in Q2 2024 vs. Q2 2023, with all categories other than Toys and Pet Products seeing falling prices over the same period.
- Gross margins continue to fall, likely due to a combination of pricing pressures and/or consumer demand as shoppers opt for lower priced items.
- Pet and Beauty remain highly competitive categories, with ad spend increases of 68% and 79%, respectively, in Q2 2024 vs. Q2 2023.
- Sponsored Brand advertising saw the most growth in Q2, with brands likely aiming to build audiences leading into Prime Day.
- Inventory levels are rising, which up until June correlated with reduced losses due to out-of-stocks. This is likely a signal that inventory mix isn’t aligned with real consumer demand.
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Data in the State of Retail Ecommerce Report is based on a compilation of anonymized data from the CommerceIQ REM Platform, which handles tens of billions of sales from global consumer brands that sell on retail ecommerce channels such as Amazon, Walmart.com and Instacart.
“Despite pricing challenges and shifting consumer behaviors, our platform’s data underscores the adaptability and growth potential in today’s ecommerce environment,” says Guru Hariharan, CEO of CommerceIQ. “Brands that make investments in AI-powered solutions to automate and optimize their online presence will be well-positioned to navigate these complexities and drive sustainable growth in an increasingly competitive marketplace.”
