– The cost to acquire customers in ecommerce has significantly increased over the past decade.
– Marketplaces are now involved in both advertising and fulfillment, creating more competition.
– Factors such as inflation, rising housing costs, and reduced access to VC money are impacting ecommerce businesses.Diversify your marketing strategies and explore new channels to acquire customers in order to adapt to the changing landscape of ecommerce.E-commerce marketing is about to shift massively. The macro reasons that a lot of people have missed are:
1. The cost to acquire a customer has skyrocketed over the last decade.
2. Marketplaces are now double-dipping on the ad and fulfillment sides of the business.
3. There is more competition, including direct competition from your manufacturers.
4. Consolidation among the largest companies in the world.
5. Internal incubators at those same companies are coming into their own to compete with you.
6. Pricing sensitivity of consumers and rising debt-to-income ratios of younger generations.
7. Inflation.
8. Rising housing and rental costs that are now cutting massively into disposable income.
9. No more zero percent interest rates, which means a lot of VC money is out.
10. Private equity would rather watch you die and buy you for pennies on the dollar than acquire you to grow you at your current state.
Every time the economy dips, prices rise, usually for those just trying to make a living. Those with money can be patient and wait for the best deals. This is the time where certain businesses start to feel the pinch of reduced margins, while those who are stockpiled with cash can just wait it out.
I didn’t even mention the rise of automation and AI in any of the above. Things are going to get interesting. #ecommerce #marketing #strategyhttps://www.linkedin.com/in/jivanco