Average e-Commerce Bill Fell 6% in 2023 Due to the Rise of Marketplaces

Key Findings

• The average e-commerce order value decreased by 6% in 2023 compared to the previous year.
• The decline was primarily attributed to the growing popularity of marketplaces, which offer lower prices and a wider selection of products.
• Despite the decrease in average order value, overall e-commerce sales volume continued to grow, indicating a shift towards more frequent and smaller purchases.

What is Driving the Decline in Average Order Value?

The rise of marketplaces such as Amazon and Walmart has significantly impacted the e-commerce landscape. These platforms offer a vast selection of products from multiple sellers, often at lower prices than traditional online retailers. As a result, consumers are increasingly turning to marketplaces for their shopping needs, leading to a decrease in average order value on other e-commerce platforms.

Another factor contributing to the decline is the growing trend of "micro-shopping." Consumers are making more frequent purchases of smaller items, rather than large, infrequent purchases. This shift is driven by the convenience and accessibility of online shopping, as well as the proliferation of subscription-based services that offer regular deliveries of essential items.

Implications for E-Commerce Businesses

The decline in average order value poses challenges for e-commerce businesses. To remain competitive, businesses need to adapt their strategies to cater to the changing consumer behaviour.

One approach is to focus on increasing customer loyalty and repeat purchases. By providing excellent customer service, offering personalized recommendations, and implementing loyalty programs, businesses can encourage customers to make multiple smaller purchases over time, rather than a single large purchase.

Another strategy is to explore new revenue streams. For example, businesses can offer subscription-based services, partner with marketplaces, or expand into new product categories that align with current consumer trends.

Conclusion

The decline in average e-commerce order value is a significant trend that reflects the changing consumer behaviour and the growing dominance of marketplaces. E-commerce businesses need to adapt their strategies to address these changes, focusing on customer loyalty, new revenue streams, and catering to the increasing popularity of micro-shopping.