Inside our Q2/23 Digital Commerce Spend Report: Investment in inventory continues to grow

Our Q2/23 Digital Commerce Spend Report brings you data-driven insights and analysis on spending patterns within digital commerce to help companies identify trends, optimise investment and inform strategic decisions. Download the report here.

Q1 saw shifts in inventory and software spend, and these have continued into Q2. We take a look at where the budget is going and which signs are pointing towards businesses focusing on growth.

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Inventory spend hits another record high

Q1/23 marked a record high for inventory spend, with 11.5% of budgets spent in this category. This continued in Q2, where over 12.7% of budgets were spent on inventory.

Even though SMB digital commerce appeared to be driving growth in average inventory spend this quarter, with a 25.5% increase compared to the previous quarter, the median actually went down by 16.4%. This is in direct contrast to Mid-market customers, who decreased their average spend by 0.8% but increased the median by 2.6%

This growth in card spend points towards companies stockpiling to fight inflation, and preparing for a surge in sales during the second half of the year, with peak season on the horizon.

“Despite a challenging macroeconomic climate, online retailers are making significant investments in both inventory and software as well as diversifying their advertising spend for continued growth,” said Samir El-Sabini, CEO and co-founder of Juni.

"With long supply lead times, even more so for ecommerce businesses who also distribute through wholesale, we know that they need to plan ahead. Ecommerce businesses are likely stockpiling now before critical retail moments like Black Friday and Christmas to ensure they can meet demand. This means capital is locked up in inventory, creating liquidity constraints. Despite this, our data indicates that online retailers remain confident in this tough climate.”

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Software spend shows signs of recovery

Software spend has increased from 4.5% in Q1 to 4.8% in Q2, and businesses are allocating more budget as the year continues. Digital agencies are leading the growth in this category, spending 26.4% more on software on average per business this quarter compared to Q1.

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Spending on sales support is still on the up and up

Google was by far the partner of choice for all Juni customers this quarter with 20.8% of spend allocated here. Google Workspace and Google Cloud were among the most-used products.

Businesses prioritised platforms that support sales initiatives this quarter, continuing this trend from Q1. Email marketing and marketing automation platforms like Mailchimp, Klaiyvo and Adroll saw an increase in spend.

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Methodology

Insights in this report come from analysing thousands of aggregated and anonymised transactions on Juni cards. SMB digital commerce represents companies with <50 employees. Mid-market digital commerce represents companies with >50 employees. Digital agencies reference both digital marketing and advertising agencies as well as affiliate marketing companies. Quarter-over-quarter comparisons consist of customers who have been active with Juni over the two quarters. Year-over-year comparisons consist of customers who have been active with Juni over that entire 12-month period of time. Numbers were compiled and analysed on a quarterly basis.