What should eCommerce brands and DTC sellers prepare for in 2024?
Triple Whale has done a deep dive into that specific question by analyzing year-over-year data from thousands of Shopify stores. They’ve uncovered some answers and actionable tips that sellers can use to gain a competitive edge in Q2 and beyond.
About Triple Whale's Data
Triple Whale analyzed just over 4,500 shops in the Shopify ecosystem that generated more than $1M in revenue in 2023 and compared it to their performance in 2022.
The ad data is blended and consists of metrics from Meta, Google, TikTok, Bing, Pinterest, Amazon, Snapchat, and Twitter. The majority of spend analyzed (~9%) is from Meta, Google, and TikTok.
After diving deep into various metrics by vertical and analyzing both business and consumer trends, the Triple Whale team shared five eCommerce predictions for 2024 that Shopify sellers and online brands should prepare for.
1. Doubling Down on New Customers
Companies will continue doubling down on new customer growth, focusing all of their acquisition dollars on new customers and allowing lifecycle campaigns to drive LTV.
Audience targeting and deliberate exclusions are going to be more important than ever to ensure spend on new customer acquisition to set up larger revenue growth from non-ad-spend marketing with an existing customer base.
2. LTV-Friendly Growth
The inherent “LTV-friendly” nature of consumable products in the food and beverage sector suggests a potential for compounded growth. The food and beverage industry is poised for even greater heights, potentially outpacing the baby and health and beauty sectors in order growth.
Repeat purchase behavior and effective marketing strategies position this industry for sustained success, assuming they’re able to continue driving new customers in 2024 with higher AOV products.
3. AOVs Will Level Out
The average order value for all industries year-over-year dropped by 0.79% in 2023, and even that slight decline was buoyed by a 16.6% increase in the Baby vertical.
In 2024, as companies increasingly focus on attracting new customers, especially through more affordable options, AOVs across various industries might remain stable or even decrease further. This shift will likely be driven by a strategic emphasis on lifecycle marketing, aiming to convert first-time buyers into loyal customers.
Brands may need to adapt pricing strategies to optimize AOV and sales volume. This involves adjusting prices based on demand, customer behavior, and market conditions. The challenge will be to balance short-term sales and long-term customer value to create sustainable growth in a competitive digital marketplace.
4. Creative is (Still) King
Despite lower advertising costs in some sectors, a general decline in CTR points to challenges in maintaining audience engagement. Blended CPCs were also relatively flat YoY across categories, highlighting the importance for brands to continually improve their creative strategy and approach to driving engagement.
As costs of impressions continue to rise, brands need to find ways to better engage their audience and break up their feeds so that their costs don’t keep trending up.
In other words, there’s a need for engaging creatives and it’s more important now than ever. Brands will have to get creative to increase their engagement rates with early product education and clear differentiation to cut through the competitive noise and drive high conversion rates.
CPCs will most likely increase too, so it’s imperative to optimize your website to convert the traffic you’re paying more to get.
5. CTRs on the Rise
With platforms like TikTok, Google, and Meta leaning into more engagement campaigns and broader targeting, CTRs are expected to increase. This would imply more effective ad content and targeting strategies that resonate with audiences.
Platform enhancements, particularly TikTok’s focus on action-driven behavior, Google’s Demand Gen, and Facebook’s Advantage Plus campaigns will likely contribute to increased CTRs to combat projected increases in CPMs.
This approach allows platforms to offer brands more reach while potentially reducing advertising costs. That said, brands should keep a close watch on the effectiveness of these campaigns.
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