Timing is everything! When to make smart inventory investments in 2024

Heading into 2024, we look back at data-driven insights from our quarterly Digital Commerce Spend Report and what we’ve learned to spend smarter this year.

‍

Get tactical with your spend

2023 was the year of focusing on cost optimisation, cash flow and liquidity. It was a challenging year for ecommerce businesses – high inflation, subdued internal and foreign demand, and tighter financing conditions are weighing on investment and consumer spending.

The year ended with a slight decrease in YoY median spend in Q4. This reflects the broader economic slowdown, aligning with reports from key financial institutions like the European Central Bank, Sweden's Riksbank, and the National Institute of Economic Research in the UK, all pointing to weak economies in these markets. We predict a similar scenario for 2024, with better perspectives for H2.

As a result, businesses got tactical with their spend. While cost optimisation focused on reducing rent, insurance and debt repayments, digital commerce businesses also invested wisely. We saw increased ad budgets and efficient changes in inventory spend.

While what you spend on remained as important as ever, another trend became clear: when you spend can bring strategic investments.

‍

Make timely inventory investments

Faced with challenges like seasonality, inflation and market contraction in 2023, ecommerce businesses shifted their inventory strategy compared to the previous year.

H1 saw the highest budget allocation to inventory, peaking at 12.90% in Q2, while this declined in the second half of the year. 2022 saw a different approach, where H2 showed smaller declines.

This tactical change shows that digital commerce businesses invest in inventory in low season, allowing them to stock up when they’re not ramping marketing spend ahead of peak season.

This approach can help manage cash flow by prioritising where you spend at key moments across the year.

Agile inventory management will be essential for success in 2024. Digital commerce businesses will need to adapt strategies to seasonality and market changes. Data-driven forecasting can help make decisions on how to optimise your stock purchases – check out our guide to seasonal inventory forecasting for actionable strategies on how to do so.

‍

Scale marketing spend seasonally

Marketing is a year-round commitment, but how you dial your ad spend up and down can significantly impact your cash flow.

In the run-up to Black Friday and peak season, marketing spend scaled in the second half of 2023, but it wasn’t a consistent ramp. Advertising budgets were higher from December 2022 to February 2023, June to August 2023 and again in November and December 2023, indicating a strategic focus on holiday promotions and year-end sales.

In 2024, evaluating your seasonal marketing success and using that information to diversify your strategies will be essential. Our guide to seasonal marketing success gives practical advice on how to make the most of your marketing in high and low seasons.

Digital commerce businesses were smart about which channels to spend on across the year. In Sweden and the Rest of Europe, search intent was a more popular investment than social engagement with businesses placing over half their budgets in Google.

As usual, both Google and Meta took a large proportion of budgets in Q4, 36.81% and 51.98% respectively, but there are some new platforms to consider too. Amazon, which made a surprise appearance as the third preferred ad platform in Q3, is continuing its rapid growth, going from 1.15% of budgets in Q1 2023 to 6.35% in Q4 . Meanwhile, Apple Search Ads is growing as an alternative. Testing and monitoring these growing platforms could help broaden your marketing strategy in the coming year.

‍

Carefully manage your cash flow

When you choose to spend is important. Pivoting between scaling inventory and ad spend is a clever strategy to keep cash flow under control during seasonal shifts in sales.

Digital commerce businesses face the challenge of bridging the gap between spending and selling, which can leave businesses struggling with their cash flow.

If you want to boost your liquidity, have cash on hand to invest in other areas of your business, and continue growing even when you’re stocking up, then capital could be the answer to your problem. I would love to you share see more metrics of email performance, for example shared in one of the marketing channels after sends. And any advice, learnings or trends you have noticed as I’m sure you have lots of knowledge to share!

With Juni, customers in the EEA* can finance their inventory invoices on terms of up to 120 days with fees as low as 3%. That means you’ll get the money you spend on inventory in your pocket to invest back into your business without waiting to sell your stock.

You can get even more cash flow freedom with Juni Capital for cards and invoices. Capital for cards gives flexible business credit lines, and you can effortlessly allocate funds across your virtual Juni Mastercard Corporate cards and streamline your cash flow management.**

Capital for invoices, powered by our Juni Invoices feature, can release the pressure on your cash flow cycles with financing on your ad invoices that gives you up to 90 days to repay***.

Juni can give you a unified view of your funds, multi-currency business accounts, corporate cards and unparalleled insights and analytics – all in one place. By centralising your spend management, you can save valuable time and have the information you need to manage your cash flow at your fingertips.

‍

*Inventory financing is available for companies registered in NL, SE, DE, ES, IT, NO & FR, upon eligibility. Fees and terms and conditions apply.

**Capital for cards is available for companies registered in UK, NL, SE, DE, FR, ES, IT and FI, upon eligibility. Fees and terms and conditions apply. Click here for more details.

‍***Capital for invoices is available for companies registered in NL, SE, DE, FR, ES, IT and FI, upon eligibility. Fees and terms and conditions apply. Click here for more details.

A brief note on the numbers

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.