Inside our Q1/23 Digital Commerce Spend Report: inventory spend reaches a record high

Our Q1/23 Insights Spend Report brings you data-driven insights and analysis on spending patterns within digital commerce to help companies identify trends, optimise spending and inform strategic decisions. Download the report here.

Q1 has seen shifts in inventory and software spend, pointing to businesses renewing their focus on growth. We take a look at where the budget is going and which sectors are making changes.

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A record high for inventory spend

Q1 2023 saw inventory spend reach a record high. Budgets almost doubled from Q4 2022 to Q1, with 11.51% dedicated to inventory. Spend is increasing month on month, making up 9.05% of budgets in February and growing to 18.22% in March. It’s becoming the category to watch in the coming quarter and a promising sign that businesses are preparing to grow.

The UK is driving the boom in this category, spending 210% more on inventory in Q1 than the previous quarter. In comparison, businesses in Sweden and the rest of Europe took a more cautious approach, reducing their average spend by 69% and 1.4%, respectively.

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Software spend sees budget cuts

Software spend slightly declined compared to Q4 2022, but it’s beginning to show signs of recovery. 4.6% of budgets were assigned to software spend in Q1 2023, compared to a record high of 17.51% in the previous quarter. However, month-on-month, the picture looks different. Businesses spent 4.85% of their budgets on software in March, increasing from 4.39% in January.

The reduction in software spend was most drastic by digital agencies, who made a 73.28% decrease, closely followed by mid-market who decreased spend by 55.53%. SMB digital commerce followed suit, with 34.91% less spend on software in Q1 2023.

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Sales support software came out on top

Businesses prioritised platforms that support sales and digital transformation this quarter. Sales support software like Zendesk and LinkedIn account for almost 18% of software spend in Q1. For digital transformation, AWS, Google Cloud and Microsoft were 12.5%. This budget distribution indicates a renewed focus on growth.

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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 100+ employees. Digital agencies reference both digital marketing and advertising agencies as well as affiliate marketing companies. Numbers were compiled and analysed on a quarterly basis.

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