Introducing Ampla’s First Retail Business Insights Report

Ampla is a trusted financial partner to hundreds of established and emerging retail brands. This affords us a unique birds-eye view into trends before the rest of the industry. Our goal is to help companies understand where they fit into this fast changing landscape so they can make informed decisions and adjustments to their strategies.

To achieve this, we analyzed hundreds of thousands of transactions with a total transaction volume exceeding $1B to gain insights into how retail is adapting to evolving market conditions in 2023. 90% of our businesses evaluated are built on Shopify, but also maintain strong wholesale and retail distribution, with an average annual revenue of $30-45M.

Our findings reveal that retail is resilient, agile, and adapting well to the rapidly changing business landscape. Here are four key highlights. You can download the full report here.

Higher gross margins showcase that retail is prioritizing profitability

Year-over-year, retail brands have increased their gross margins by 10%. As access to outside capital decreases, the industry is the necessary measures to build sustainable businesses for the long term. The two industries with the highest median gross margins are jewelry (73%) and beauty (63%), while the lowest are food (44%) and pet (42%). Non-alcoholic beverages saw the widest margin expansion, growing 25% over the past year.

Decreasing discounts to adjust to inflation and increase profits

To adjust for inflation, retail is moving away from discounting and sales, with a 7% decrease in orders with discounts over the last quarter, and a 5% decrease in the size of the discount. Industries that have cut back on discounts the most include beauty and household goods, which saw the number of orders with discounts applied drop by 19% and 12% respectively over the past quarter.

Increased adoption of wholesale and marketplace sales channels

To remain competitive in the current market, more retail brands are warming up to the idea of wholesale retail channels, which includes big box retailers like Walmart and Target, as well as distributors like UNFI or KeHe. In the last quarter, there’s been a 6% increase in brands turning to these channels. While last quarter it accounted for 19% of sales, they now represent 25% of sales on average among retail customers.

Retail slashes TikTok paid ads as fears of a ban arise

The performance media landscape is looking more like it did a few years ago, with Facebook’s market share amongst our data set rebounding from 61% to 73% YoY. TikTok has seemingly lost some momentum, falling from 6% of total spend in Q1 2022 to just 3% in Q1 2023, perhaps due to fears of government regulation. Generally, brands are more aware than ever that they can’t build businesses solely around paid social, and need to consider it as one tool in a part of a larger marketing effort.

These are a few of the insights we found most compelling. If you’d like to read the full report, you can download it here.