July 12, 2022

So far, 2022 has been quite the ride. From supply chain disruptions, labor shortages, the war in Ukraine, volatility in the stock market, and rising inflation, many brands and third-party logistics (3PL) businesses have had to deal with greater uncertainty than in prior years. With COVID driving increased ecommerce in 2020 and 2021, many thought it might never slow down, but 2022 has shown how global and economic uncertainty can quickly flip the equation.

Other factors contribute to the caution and concern in the supply chain and with ecommerce. The job market remains strong with unemployment at 3.6% and the Bureau of Labor Statistics shows 372,000 jobs were added in June. At the same time, the consumer confidence index dropped 4.5 points to 98.7, driven by fears of continued inflation and economic growth.

To help brands and 3PLs understand ecommerce demand fluctuations, Extensiv publishes Amazon, Shopify, and other marketplace ecommerce order volume trends on Extensiv Market Insights. The site provides year-over-year and week-over-week changes in average order volumes across thousands of merchants processing millions of orders. This data helps merchants correlate the trends in their own business with the broader market, enabling them to quickly adapt within a rapidly changing marketplace.

Overall, for ecommerce giants Amazon, Shopify, and BigCommerce, we have seen a broad regression to the pre-COVID mean across average order volumes per merchant over the last two quarters. However, if anyone is winning this race, it appears to be Amazon merchants whose “new normal” has only slightly but consistently outperformed their pre-COVID average, while Shopify and BigCommerce order volumes have consistently underperformed the pre-COVID average year-to-date. Amongst the smaller players, there is evidence that the rising tide of ecommerce has lifted all vendors. The long-tail of other marketplace providers has seen consistent overperformance against the pre-COVID average.

Below is a brief synopsis summarizing the data flowing through Extensiv’s software to provide perspective on where brands have seen growth or where they see headwinds.

Amazon is The Merchant Favorite

In Q2 2022, Amazon merchants showed a 7% decrease in average order volume as compared to Q1 2022. And year-over-year, Amazon merchants showed a 4% decrease in average order volume. However, this is offset by a 15% increase in merchants selling through Amazon quarter-over-quarter which may suggest merchants favoring the relative performance of the Amazon marketplace compared to other channels, and behavior indicating a preference for sales volume over sales margin. This could also be a sign of growing or normalizing inventory levels as Merchants are less likely to use a higher volume, lower margin approach like Amazon when inventory levels are low.

This past week, we saw Amazon order volumes by merchant increase nearly 9% after two weeks of decline (decreasing 16% in week 26 and 5% in week 25). As consumers across the US gear up for Prime Day on July 12th and 13th, order volume is expected to increase this week, giving many merchants an added boost in orders to make up for some of the fluctuations earlier this year.

Overall, Amazon order volumes by merchant remain above pre-COVID levels, but still well below 2020 volumes. Historically, July marks the time when order volumes begin to increase as consumers gear up for back to school, Halloween, and then the holiday season.

Shopify Order Volumes

For Shopify merchants, average order volumes remained flat from Q1 to Q2 2022, with an increase of only 0.4% in average order volumes from quarter to quarter. However, as compared to Q2 2021, Shopify merchants saw a decrease of 7% year-over-year in their average order volume per quarter. On a quarter-over-quarter basis, the number of merchants using Shopify increased by 11%. Based on the limited change in order volumes this year, merchants may be neutral on the outlook of Shopify.

During the first half of 2022, Shopify order volumes by merchant showed significant decline year-over-year. However, these numbers began rebounding in early May and consistently performed better in June versus 2021. The rebound in merchant order volumes in May through Shopify suggests improved inventory levels.  
Shopify average order volumes by merchant continue to fall below pre-COVID levels by 1.5% (comparing Q2 2019 to Q2 2022), though slightly above 2021 volumes.

All Other Marketplace Order Volumes

The combined volumes for other marketplaces (including those like Google Shopping, Etsy, BigCommerce, WooCommerce, and more) indicate modest average merchant order volume growth of 2% from Q1 to Q2 of 2022. However, as compared to Q2 2021, average order volumes showed a significant decrease of 24% year-over-year. Of note, the number of merchants using other marketplaces increased by 7% quarter-over-quarter.

While average order volume by merchant remains above pre-COVID levels for all other marketplaces, it shows a marked decline year-over-year. In many cases, year-over-year volumes are down in excess of 20%.

Ecommerce Data Trends Summary

As we compare performance across the different channels, merchants have chosen Amazon as their preferred channel based on continued increasing adoption of Amazon as a sales channel and more stable year-over-year order volume performance. However, as we look at Q1 to Q2 performance, Amazon was the only channel that showed a reduction in average order volume by merchant.

Looking across all ecommerce channels combined, including Amazon and Shopify, average order volume by merchant is down year-over-year, with many weeks showing decreases of 25% or more as compared to 2021. As many consumers have begun more in-person shopping in recent months, the decrease in ecommerce isn’t entirely unexpected. However, merchants without physical storefronts and 3PLs that focus on ecommerce fulfillment should continue to monitor these fluctuations and build plans to adjust programs accordingly. There has never been a better time to optimize programs for efficiency and accuracy.

To learn more about how to automate your organization’s fulfillment strategies, download the Fulfillment Automation Guide. To stay up to date on the latest Market Insights, please subscribe to our blog.

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