The e-commerce industry is having a Groundhog Day moment. Third quarter results were much like the second and first: slowing growth and cutting costs. Below, a look at key themes and trends from third quarter e-commerce results.
I Got You, Babe
It’s Groundhog Day for e-commerce. Like the first and second quarters, the post-pandemic e-commerce penetration reversion to the mean ( this chart, once again) continues to dominate industry trends. Consumers have more options for where to spend — online or offline, goods or services — and tighter budgets as nagging inflation increases the price of essentials like food and gas. As a kicker, the strengthening US dollar is pressuring top-lines for companies with international sales, knocking a few percentage points off of reported growth rates.
With the exceptions of Amazon and Shopify, e-commerce firms either decelerated (Poshmark, The RealReal, ThredUp), declined outright (eBay, Wayfair), or did both (Etsy, Farfetch). It’s not all rainbows and unicorns for Amazon and Shopify either. Amazon’s growth benefited from shifting Prime Day to the third quarter in 2022 from the second quarter in 2021, while Shopify’s GMV includes brick-and-mortar sales, which are outpacing e-commerce.
Amazon’s earnings calls are notoriously boring. However, its third quarter call was slightly less anodyne and slightly more cautious. That itself is notable. The company saw growth moderate throughout the third quarter, particularly in Europe, where consumers are feeling glum amid high energy costs, slowing growth, and the war in Ukraine:
What we saw in Q3 was a really strong July with a great reaction to Prime Day globally. And the resumption of things like in-stock rates are starting to come back, and delivery speed was coming back. And that continued through the quarter, but growth rates started to slow a bit. And primarily in the consumer stores business, it was in international. North America, obviously, it was strong, but it started to slow a bit. But it was mostly in international where we saw the biggest impact, and we think that is tied to a tougher recessionary environment there. Compared to the U.S., it’s worse in Europe right now. The Ukraine war and the energy crisis issues have really compounded…