eCommerce revenues are on the decline — using AI for ads can help you beat the trend

eCommerce revenues are down in real terms once you factor in high inflation. Companies must find ways to beat the market; AI ads offer them the path to compensate for the loss of relative earnings.

As reported by the Svensk Handel, a snapshot of e-commerce figures during the Christmas period of November and December provides some hope. Turnover rates roughly matched the year-over-year figures, which might come as a surprise given the gloomy economic predictions of the last year. However, despite these initial positive numbers, they hide a decrease in purchasing volumes. 

 

Trade is up, but it can’t paper over the gaps when we factor in inflation. Prices have increased due to increased energy costs and supply chain issues. One Swedish Krona buys far less than it did this time last year. Any comparison of economic activity needs to account for this relative loss in value. 

 

If the market was truly growing, we should expect a higher monetary value for November and December purchases. However, we don’t see this. Year-over-year sales in every month in 2022, except for September, have declined. And all of this has happened in most industries, despite inflation bumping prices.

 

What is causing the decline in eCommerce spending? 

There are a few factors that are closing a drop in eCommerce spending. 

 One of the most significant points is that consumers are returning to pre-Cold habits. Shoppers are keen to return to brick-and-mortar stores. Additionally, fears over recession and inflation suggest consumers now favor necessities, which hits luxury goods. 

 The surge in eCommerce spending during COVID has proved less persistent across the board. However, there are some sectors where change is permanent. The question remains whether the ground made up resulted from organic shifts in consumer behavior or that necessity caused the rise in areas that had little e-commerce activity in the first place. 


The worldwide trend in eCommerce consumption
 

The World Economic Forum forecasted a drop in eCommerce spending last year. This forecast was remarkable because it was the first time predictions suggested that eCommerce market spending had shrunk. Previously, year-over-year growth was a runaway train led by digital adoption and better technology. 

 Statista’s Digital Market Outlook suggested that the COVID-19 lockdown “frenzy” would crash down to earth. They maintain that the growth acceleration within the sector was unsustainable, and things would return to a more stable level. 

 Statista offers three primary reasons for the slowdown. Each causal factor will be pretty familiar: 

  • Inflation 
  • The potential for a recession and rising unemployment 
  • Supply chain issues. 

Global macroeconomic causes will also be felt in the Swedish market, where eCommerce figures are also slowing down. 


eCommerce is on the decline in Sweden in 2022
 

eCommerce numbers are dropping domestically in Sweden by around 9%. If we include eCommerce figures from abroad, that number drops by about 12%. But when we factor in inflation, which is between 4% and 11% for some sectors, those numbers make for a much grimmer reading. 


What can businesses do to overcome this slowdown?
 

Fortunately, not all businesses are feeling the effects of this economic drag. Companies embracing AI ads are overcoming these trends thanks to more cost-effective and cost-efficient ways of getting their products in front of consumers. 

 Amanda AI bucks the trend significantly. Businesses using Amanda Ai increased their year-over-year conversions in Sweden by 25.5%. During the same time period (2021 vs. 2022), the return on ad spend (ROAS) was up by 8.3%.  

 Furthermore, the median conversion value of Amanda AIs’ customers led to an increase of 17% in conversion value. So, while the general picture for eCommerce revenues across Sweden is negative, businesses that utilize AI ads are thriving. 

 Using Amanda AI leads to better results for eCommerce businesses for various reasons. In particular, our robot saves you time and money. 

 Putting together high-converting ads takes a lot of work hours. Creating ads, copy, and creatives can be a chore. Amanda AI crawls your site and finds prices, images, and copy, eliminating the mundane tasks of getting your inventory in front of customers. For eCommerce stores with extensive stocks, this is particularly helpful. 

 However, Amanda AI excels in finding cross-platform placements that make an impact. Testing out where your ads will do best requires juggling so many variables that you won’t have time for much else. Amanda AI takes that burden and uses impact-based modeling to determine which ads will do best with specific customers on particular ad channels. 

 Finally, Amanda AI uses smart bidding to ensure your ad budget goes further. Much of ROAS and ROI is about ensuring that each conversion comes at the correct cost. You can accelerate sales using a scattergun approach to ads, but it will cut your margins. Amanda AI ensures you pay a fair price for each ad, meaning your profits and not just your revenues go up. 

 When eCommerce sales are slowing down, you need the assistance of an AI that can outperform humans. Amanda AI is helping customers outmuscle their rivals and ensure they aren’t feeling the effects of a declining market.  


Conclusion
 

eCommerce spending in Sweden and Europe is down in real terms. Supply chain issues, inflation, and recession worries are to blame. Additionally, the vast rise in eCommerce activity due to COVID-19 lockdown measures has slowed digital adoption. 

 However, not all businesses are feeling the effect of this slowdown. Forward-thinking firms that embrace AI ads post excellent ROI, ROAS, and conversions.  

 Amanda AI helps companies save time with ad creation and finds better placements that help them connect with well-suited customers. Additionally, our robot’s sophisticated ad bidding strategies help businesses save money on ads, meaning their budgets go further.  

 While eCommerce sales might be dropping across the board, yours don’t have to. They can continue to trend upward. Get in touch today to find out how we’ve helped businesses like yours beat the market. 

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