As we are about to enter a new year, it is wise to reflect on mistakes or areas for improvement. E-commerce giant Shopify enjoyed a lion’s share of business this shopping season, though research conducted by Ampla Technologies revealed there were some categories of businesses that could not perform well.
Here are three categories on Shopify that suffered a revenue drop:
1. Food
It was the most affected business category on Shopify this year as food revenue dropped from 12.57 percent YoY to -9.58 percent. The drop in percentage hints at a shift in the shopper’s priorities. Unlike the last two years, shoppers had the option to buy from brick-and-mortar stores and add to this, the number of online businesses continued to grow competitively.
After the Black Friday Cyber Monday (BFCM) sale concluded, Shopify released its data, claiming that its merchant partners registered record-setting sales of $7.5 billion. Before the holidays, Deloitte had anticipated in a survey that most of the shoppers would use this shopping season to buy products for gifting purposes. However, Shopify’s report claims that products from apparel and accessories were the top-selling categories during the BFCM 2022 shopping season.
The list was followed by health & beauty and home & garden segments. The research added that trending products during the festive sales include Gymshark’s Training Leggings, Rosemary Mint Scalp & Hair Strengthening Oil by MIELLE and Our Place’s Always Pan.
ALSO READ: $7.5 Billion: Shopify Merchants Set New BFCM Sales Record
2. Beverage
Another category of business that didn’t enjoy the holiday shopping season was the beverage category. Its revenue dropped from 16.3 percent to -14.7 percent on Shopify. The Ampla Technologies research only included non-alcoholic beverages sold in various Shopify stores.
In August, Shopify announced a partnership with DRINKS to allow merchants to sell wine in their online stores. The DRINKS app, first launched for Shopify Plus merchants, is supported by real-time tax calculations and compliance solutions. Directly integrated with Shopify checkout, this feature provides a marketspace to wineries and retailers to expand their Direct to Consumer (DTC) business. The Shopify ecosystem promises these businesses a platform to “create, customize, scale, and monetize”.
3. Wellness
Shopify stores that fall under the Wellness category also suffered from low sales this shopping season. Its drop in revenue was slightly low in comparison to other categories mentioned above. The wellness category’s revenue dropped from 33.5 percent to 28.8 percent this holiday season.
Ampla Technologies also found in its research that the social media platform Facebook recorded the highest advertisement spend percentage by Shopify merchants this shopping season. In November, Facebook’s advertisement spend percentage reached 80 percent, while TikTok came third in the ad spend percentage with only three percent of the share.
The research further added that Shopify merchants earned 18 percent of their total revenue and saved up to 22 percent. During the holiday season, independent brands registered 12 percent of revenue, while it was 14 percent of the total orders on Shopify.
What do Shopify Merchants Need to do?
Ampla concluded in its report that merchants must use embedded finance and maintain a balance between inventory and sale prices. It is of foremost importance that essential technological advances are required to fulfill consumer needs.
Having said that platforms like Shopify are of great help to aspiring entrepreneurs. While e-commerce giants like Amazon too enjoyed the BFCM 2022 sale, over 52 million consumers preferred to shop from stores powered by Shopify. This is 18 percent more than the last year’s BFCM data.
Independent Selling
The BFCM 2022 helped the merchants showcase the power of independent selling across the globe.
“This year, Black Friday Cyber Monday showed us once again that consumers are voting with their wallets to support the independent brands they love,” Harley Finkelstein, President of Shopify, said.
“We saw record level shopping happening across all channels this weekend, proving businesses that meet their customers where they are, whether that’s online or in-person, will earn their loyalty in return,” he added.
After the end of Black Friday, Shopify stated that the highest number of shoppers purchased boxershorts from Snocks GmbH, a socks and sneaker manufacturer based in Mannheim, Germany. The second most sold product on Black Friday was peptide glazing fluid by Rhode. Another product that sold like hotcakes during the Black Friday sale included Luxe Core Sheet Set by Brooklinen. All these brands have their online stores powered by Shopify.
