Online Retail Did Well in 2023
In hindsight, 2023 may not have been as gloomy an economic year as first thought. At least not for online retail in certain global regions.
According to findings from data and insights company Consumer Edge, many online retailers and those in the pet products/services, discount/club stores, ground transportation, health products/services grocery and limited-service restaurants saw growth in the second half of the year across three geographies. The analysis from Consumer Edge, which is also a provider of global-transaction revenue signals, cited inflation as the likely villain for declines in discretionary spending in luxury items both online retail and in physical stores.
“Luxury became the worst performer out of all the industries in the U.S. and U.K. and the second worst in the EU, second only to travel,” said Michael Gunther, Vice President, Head of Insights at Consumer Edge. He added that the luxury category was especially hard hit in the U.S. and U.K. and performed almost as poorly as travel in the EU.
Meanwhile, fast-fashion retailers (e.g., H&M, Uniqlo, etc.) saw growth, offsetting softness in luxury in the back half of 2023 across the three regions. Growth in consumer spends were down globally for the higher-ticket women’s apparel/accessories sub-industry.
Gunther attributed this H2 trend to a challenging macroeconomic environment. “Strained budgets generated increased interest in more affordable items,” he said.
The consumer categories that grew did so because they filled basic needs, provided a necessary level of convenience, and were affordable, the report said. To that end, consumer spending on pet products also increased because as any pet lover will tell you, food, toys, blankets, brushes, leashes, toys, and clothing for furry family members are essential, not discretionary.
Consumers continued to dine out in 2023, more so than in 2022, but results were mixed, with full-service restaurants ( e.g., Olive Garden, Applebee’s Cheesecake Factory) seeing spending growth declines and the number of visits tail off from H1 to H2.
Limited-service restaurants (e.g., Chipotle, Chick-Fil-A, and Sweetgreen) saw higher spending growth in 2023 than 2022 even as prices rose. Gunther described this finding as “trade-down behavior” among consumers who were watching their budgets.
High mortgage rates and limited housing stock put pressure on the home and garden industry in the U.S. in the second half, while sales increased modestly in the category in the U.K. and EU.
Gunther said brand decision makers can use H2 2023 insights to tailor their marketing and pricing by keeping resilient but cautious consumers in mind. “By understanding the competitive landscape and changes in wallet share, companies can potentially adjust strategy to focus on higher growth areas,” he said. “Brands can identify impactful shifts in consumer behavior and new emerging trends by reviewing transaction data and leverage this data to make sound data-backed business decisions in the year ahead.”
In August, Consumer Edge rebranded and introduced the Consumer Edge Insights Center (CEIC), with live content on the Consumer Edge YouTube channel.
At the time of the rebrand, Consumer Edge CEO Bill Pecoriello said in a statement, “This website rebrand marks a pivotal moment in Consumer Edge’s journey. We have achieved incredible growth and accomplished major milestones that have positioned us as the go-to resource for global transaction data insights. The new website showcases our successes and provides an enhanced user experience that reflects our commitment to delivering top-notch consumer data solutions and market intelligence.”
The newly rebranded Consumer Edge corporate website and the Consumer Edge Insights Center (CEIC) are now live and accessible to users worldwide. Visit the website at www.consumer-edge.com to explore the comprehensive suite of resources and unlock the power of global consumer market intelligence.