Marketplaces Up As Advertising and Ecommerce Analysts Predict Mixed Holiday Quarter

A recent article from MediaPost provides a good summary of the state of the eCommerce industry from the point of view of advertisers and analysts.

The top 20 US media agencies saw new billings decline 35% compared to the same period a year ago, through the first 8 months.

Baird Equity Research reports that consumers prioritize values this holiday season with Amazon, Walmart, and eBay gaining the most share, and expect consumers to turn to marketplaces more this holiday season.

While Baird predicts holiday eCommerce to grow 10% year over year, their survey of 1000 shoppers indicates that a larger portion of consumers expect to spend less online this year than last year. This suggests that they believe shoppers with higher incomes will make up the difference.

Overall the results from the Baird survey are somewhat higher than what other analysts are predicting with Adobe at 2.5% growth, Bain at 4%, and Mastercard at 4%.

To me, what’s most interesting from this news is the shift towards marketplace spending this holiday season, benefiting to Amazon, eBay, and other retailers with a wide selection and value pricing. Does this mean brands not on these channels could see a rough holiday?

Magic 8 Ball Says All Signs Point to Yes.

Let’s say you decide that sales rising 4% year over year this holiday season is a decent consensus estimate, which includes marketplace sales. The subtext here is not great for direct-to-consumer sales even if that's true.

This is because marketplaces will generate an even greater share of wallets this holiday season than last year.

It means that the average direct-to-consumer forecast for non-discretionary purchases could be flat to slightly up, and the same forecast for discretionary purchases could be off by 5% or more as lower-income consumers deprioritize full-price spending.