2024 Predictions!
Happy Friday, everyone! Believe it or not, it’s December and that means it’s time to dust off my crystal ball and make some predictions for the year ahead. We’ll explore a few of the trends I’m expecting to scale in 2024 as well as take a look at some key stats from last week’s “Turkey 5” shopping holiday in the US. Let’s get to it!
A Look Around the Corner: 2024 Predictions (LINKS BELOW!)
TL;DR – As we approach the home stretch of 2023, it’s time for an exciting annual tradition; no, I don’t mean complaining that, “it’s dark already” at 5pm, but rather year end predictions! The way I like to approach this is to consider trends that we’ve seen start to gain traction and have some data point or insight that leads me to think it could scale going forward. Let’s dive in!
The Year of Partnerships – Across retailers, tech, media, and brand, expect to see more connections being made to navigate cookie deprecation, reduce friction in commerce, and to lean into unique capabilities. No one is good at everything (sorry to break it to you!), and partnerships have the potential to unlock huge value for the involved parties in our complex media ecosystem. Retailers have tons of purchase data and can move product, media companies have great platforms and behavioral data, and brands bring their products and media dollars. While retailers push to scale their own media networks, their most valuable asset is actually their consumer data. This could be like the partnership Instacart struck with The Trade Desk to allow advertisers to build audiences with their data (AdAge – LINK) or it could be measurement solutions powered by their conversion data. Additionally, partnerships like the one struck between Amazon and Meta (and Snap, and Pinterest) have been cropping up to run commerce ads across their networks and frankly I’m shocked at how little chatter this has generated.
AI Goes from Buzzword to Utility – While creating poems about retail media networks in iambic pentameter and generating Guy Fieri-inspired art is fun, we’re at a point where AI is going to hit the mainstream as it’s integrated as part of platforms we use every day like Microsoft’s Office and its applications help marketers tackle challenges like generating iterative creative and speeding up what was once manual analysis. I don’t believe the machines are coming for our jobs; however, I do think the table stakes will be raised by the technology. A great example of this is Amazon offering AI tools to improve product shots for sellers (The Verge – LINK) – more on this later.
The Total Consumer Experience Grows in Importance – I don’t believe that the marketing funnel is broken or inverted, rather everyone’s funnel is different depending on what they are shopping for and when. Younger consumers are increasingly beginning their journey with a purchase and swinging back to consideration to learn more about brands if they have a good experience (Fast Company - LINK.) For those consumers, creating seamless purchase experiences is critical. For others, they may take a more traditional route to research a brand before making a choice. Brands must be ready to meet their consumers where they are and should not expect a one-size-fits-all approach to work.
Social search finally takes off – While social commerce has been “coming soon” for a while, it’s now expected to reach $100B by 2025. On top of that, a ton of time is being spent on these platforms - upwards of 2 hours a day on TikTok as compared to 9.7 minutes a day on Amazon. Paid search offerings launched on Meta and TikTok with little fanfare but as social commerce ramps up, the stakes will raise for brands to win these searches.
Retailers Create True Omni Networks – As retailers look for more ways to continue to grow their media networks, in-store inventory represents a ripe opportunity. We’re seeing digital signage begin to become available along with offerings like in-store radio but it’s still early days. The ability to connect and optimize the online and offline experience is a challenge that retailers are uniquely positioned to solve, and the technology is catching up.
Entertainment Redefined – Viewing behaviors continue to evolve with social platforms and creators continuing to grow the amount of time consumers spend with them. This is why we’re seeing creators essentially becoming media companies with multiple shows and other creators working under them (AdAge – LINK.) On top of that, we’re beginning to see new programming skip traditional networks and dropping directly on platforms like TikTok and Instagram where viewers are increasingly consuming long-form content (Wired – LINK.) Even retailers are getting in on the action – Walmart is dropping a 23-part holiday series on TikTok, YouTube, and Roku that will feature 330 shoppable products (AdAge – LINK.) How and where media is consumed is materially changing which means brands will need to reconsider how they connect with consumers in the year ahead.
Matt’s Hot Take™ - As always, if I could get all of these predictions right, I would be sipping on a crisp Sancerre with my neighbors George and Amel Clooney at my villa on Lake Como right now instead of writing this newsletter from my basement in Pennsylvania. However, it’s important for us to think about the future so we can be prepared for what’s coming next in 2024. This is also my annual opportunity to share one of my favorite quotes that comes from Dwight D. Eisenhower who once said, “Plans are worthless, but planning is everything.” We are living in dynamic times and the world around us is changing daily. The only way for us to try to keep up is by being curious focused on continuous learning. What are you expecting to see in 2024?
”Turkey 5”: By the Numbers (LINKS BELOW!)
TL:DR – While we’ve seen promotions starting earlier and earlier each year, the 5 days between Thanksgiving and Cyber Monday still represent a critical moment for eCommerce and the retail landscape at large in the US. Here are a few of the most notable stats coming out of last week’s retail bonanza:
$37.2 Billion – Total online sales for the period between Thanksgiving and Cyber Monday, which is up +5.5% YoY (AdWeek – LINK.)
$12.4 Billion – Cyber Monday online sales which represents the biggest online shopping day of the year!
+42.5% - The increased usage of Buy Now, Pay Later (BNPL) on Cyber Monday, representing $940 million of sales. Since November 1, BNPL services accounted for $8.3 billion in total spending, up 17% year over year and projected to make November the biggest month on record for the payment method (Fox Business – LINK.)
200 million - Shoppers who made a purchases both in-store and online during the Thanksgiving weekend, according to the National Retail Federation (NRF), +2% YoY and driven entirely by eCommerce (Reuters – LINK.)
80% - Consumers that used digital channels to shop during the Thanksgiving weekend (AdWeek – LINK.)
5% - Increase of online sales in the first 20 days of November vs 2022 driven by retailers trying to capitalize on early demand (New York Times – LINK.)
9.61 Million – The average number of viewers for Amazon’s Black Friday NFL broadcast. While it was the most watched game on Friday, beating out the barnburner college matchup between Iowa and Nebraska, it was Amazon’s second-least viewed game of the season and trailed Thursday’s NFL games which averaged 34.1MM viewers (AP – LINK.)
Matt’s Hot Take™ - Despite inflationary pressures, earlier/longer promotions, and on a personal note, a lack of deals on nearly everything on my shopping list! – the days surrounding “Black Friday” continue to be extremely important for brands and retailers as we saw another year of record-breaking sales. While the Amazon Black Friday football broadcast didn’t draw the kind of audience that the traditional games on Thanksgiving did, what it did represent was another element of innovation coming into the mix with the incorporation of shoppable ads during this key commerce timeframe. Given the growth that continues to be driven by eCommerce, the importance of strong digital fundamentals was once again on full display.
Quick Hits
Hyundai to Be First Automaker to Sell New Cars on Amazon (Wall Street Journal - LINK) – Starting in 2024, U.S. auto dealers will be able to sell new vehicles on the tech company’s platform, making Hyundai the first automotive brand to offer such an option for customers. Prospective buyers will be able to search on Amazon’s website for available vehicles in their area and either pick up their new car at a local dealership or have it delivered to their home. As part of the partnership, Hyundai will include Amazon’s Alexa technology in the brand’s cars beginning in 2025. This is a great example of meeting consumers where they are and providing an alternative to the often less-than-fun in-person buying experience. Zooming out, it also continues to position Amazon as truly the “everything store” for consumers.
Amazon Now Lets Advertisers Use Generative AI to Pretty Up Their Product Shots (The Verge - LINK) – With its AI image generation tool, Amazon is offering an easy way to create backgrounds or scenes around whatever product ad buyers are hoping to sell. This is a great example of a super functional application of AI that I think we’ll see more of as we get into 2024. It’s so significant because the technology levels the playing field for sellers and makes having great imagery on PDPs table-stakes going forward.
United Airlines Weighs Using Passenger Data to Sell Targeted Ads (Wall Street Journal - LINK) – As data and targeting continues to become more complicated, United Airlines, an entity with an enormous amount of data, is considering leveraging that passenger data to help brands serve targeted ads. Not only do they have data, but they have high engagement surfaces like their app and in-flight entertainment systems to deliver advertising. While I feel like we’re in a bad Oprah meme where everyone “gets a media network” – its hard to say this doesn’t make sense and is certainly an entrant that brands should keep an eye on.