Seema Shah · August 2023
Deals Drive Consumer Spending
Back-to-school spending is projected to be down 10% YoY, leading retailers to start promotions early. Some winners in the retail sector include beauty, athleisure, and apparel brands, while consumer electronics and department stores struggled. Chinese e-commerce sites Shein and Temu saw significant gains in monthly active users (MAUs), with Shein increasing advertising spend to capture consumer value. July saw key shopping events from retailers like Amazon, Target, and Walmart, resulting in increased MAUs and engagement. Seasonal categories and apparel also saw growth, driven by Shein.
Key Takeaways:
The macroenvironment continues to pressure back-to-school spending, which is projected to be down 10% YoY for families with students K-12, per Deloitte, likely propelling retailers to pull forward their promotions to grab demand early, as 59% of back-to-school budgets will be depleted by the end of July
Still there were some winners: for the ST retail cohort ex-Temu, downloads and MAUs grew 3.4% YoY and 6.3% YoY, respectively, driven by strength in beauty (Bath & Body Works and Sephora), athleisure (lululemon) and apparel (Shein), offset by consumer electronics (Best Buy and Apple) and department stores. Including Temu, ST’s retail cohort’s2 downloads and MAUs increased 70% YoY and 27% YoY, respectively, with marketplaces/mass merchants seeing the biggest jump
Chinese e-commerce sites Shein and Temu are seeing the largest gains in MAUs, up 19% QoQ and 76% QoQ, respectively in FY 2Q23. To capitalize on consumers’ focus on finding value, Shein advertising spend has spiked and made up 5% of total BTS spend in 2022, up 10x YoY, per Pathmatics by ST data
July was a key month for retailer-created shopping events, including Amazon’s Prime Day sale, Target Circle Week and Walmart+ Week, as retailers vye to gain a greater share of consumers’ wallets. Per ST data, Jul’23 MAUs rose 1%, 4% and 3% MoM at Amazon, Target and Walmart, respectively, while new users and engagement also increased
Seasonal categories saw improvement in MAUs in FY 2Q23, with growth accelerating from FY 1Q23
Apparel MAU growth was robust, up 24% YoY in FY 2Q23, in line with positive momentum seen in monthly US retail sales YoY and driven by Shein
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