Has ecommerce peaked, Traditional P&L statements don't work, TikTok as a search engine | D2C Digest

Weekly DTC News

Hey there, great people of the D2C community who are building fantastic things! This is your host Berkay writing. 

Take a 5-minute break and dive into D2C Digest for a quick overview of what’s happening in the D2C market worldwide!

📊 Is ecommerce nearing its market saturation?

A recent Forbes article discusses that despite a surge during the COVID-19 pandemic, recent data suggests a slowdown in e-commerce growth, raising questions about market saturation and consumer preferences.

This slowdown poses several questions: Is ecommerce nearing its market saturation? Are consumers reverting to traditional shopping experiences?

In our edition last week, we discussed that D2C is not dying but the sector needs to adapt to the changing landscape. One major aspect of that changing landscape is the omnichannel retailing.

The rise of omnichannel retailing further complicates measurements of e-commerce growth, as online and offline sales interactions become intertwined. Retailers must adapt by understanding and anticipating customer behavior across various channels. D2C entrepreneurs can thrive by embracing omnichannel strategies and focusing on enhancing the customer experience through technology and adaptability.

What do you think, is ecommerce close to its peak?

🧾 Traditional P&L statements don’t provide insights

Usually, we talk about what's new in the world of D2C, but this time, we've got something different to share. Check out this LinkedIn post by Maximilian Rast, founder of Klar, —it breaks down the accounting side of e-commerce, so you can get a better grip on it.

According to Maximilian, many e-commerce founders mistakenly believe that traditional profit and loss (P&L) statements from accountants provide comprehensive insights into their business, but these are designed for regulatory compliance, not transparency.

To gain better visibility and alignment across departments, a structured e-commerce P&L should include elements like GMV (Recommended Retail Price of sold products), Discounts, Vouchers, Shipping Revenue, Gross Revenue, Returns, Taxes, Net Revenue, Cost of Goods Sold, Contribution Margins, Logistics Costs, Transaction Costs, Marketing Costs, Overhead Costs, and EBIT.

This structured approach allows for a clear understanding of the financial health of the business and enables analysis across various dimensions, promoting transparency and informed decision-making among team members.

Check it out for more details!

📈 TikTok appears as a top search engine

Search habits are evolving, with platforms like TikTok gaining traction alongside Google.

According to Adobe Analytics, TikTok has secured the fourth position among preferred search platforms, indicating a shift in user preferences. Notably, 40% of Americans have used TikTok for searches, with 1 in 10 Gen Z favoring it over Google.

Even Google is adapting, and integrating TikTok videos into featured snippets to appeal to younger audiences.

The appeal of TikTok lies in its storytelling format, personalized content, and real-time information. As TikTok becomes a hub for trends and news, its impact extends to Google search results. Brands should consider leveraging TikTok for product demos to enhance visibility. In light of fragmented search habits, a comprehensive SEO strategy encompassing both Google and TikTok is crucial for maintaining visibility amidst evolving preferences.

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