Ecommerce business is on the rise: Looking back at Q1

Before the pandemic, economic and technological changes were already forcing traditional brick and mortar businesses to adopt new digital experiences and solutions, and it’s no secret that Covid has hugely boosted the ecommerce landscape across the globe. Over the past two years, people have had no other option than to turn to online stores to get their shopping fix (some things essential, some not so much), and the trend has continued into Q1 of 2022, with a new high in consumer spending. 

Q1 ecommerce trends and highlights

By all accounts, it’s been a big ol’ quarter for retail ecommerce, well up on the previous two years. According to a reputable 2022 Q1 ecommerce analysis, people spent more than $2.2 billion on goods online this quarter; up 31% year on year, and a whopping 86% up on the first quarter of 2020!

Q1 did have big shoes to fill, with lucrative 2021 Q4 sales events like Black Friday, Cyber Monday, and the usual Christmas spending driving ecommerce sales through the roof. Q1 this year didn’t have the same advantages, and experienced a number of challenges like human resource setbacks caused by Omicron, an escalating global conflict, resource and supply shortages across many sectors, and the rising cost of living. Despite these challenges, we’ve had a hugely successful ecommerce quarter, and it’s worth celebrating!  

“But what about the impact of inflation” we hear you ask? According to the report, total online and offline retail spending for this quarter was $16.4 billion; an increase of more than a billion dollars (7%) year on year. With inflation currently sitting at around 6.9%, much of this rise could be attributed to the rising cost of goods, rather than real growth. But it’s not all bad news; more than half of this increase comes from the uplift in online spending, which shows us what a huge role ecommerce plays in keeping the retail sector humming along.

The top takeaways from Q1 2022:

  • Compared to Q1 last year, Homewares and Appliances & Electronics were up 38%, Health & Beauty was up 37%, and Clothing & Footwear was up 36%. 
  • The category with the highest quarterly spending and transaction levels since the start of 2019 was Health & Beauty, driven by strong growth in ‘Drug Stores & Pharmacies’ and ‘Misc. Medical.’ 
  • Most of the remaining sectors saw more than 25% online spending growth, except Recreation, Entertainment, and Books & Stationery, which experienced a 12% year on year increase. 
  • Buy Now, Pay Later continues to dominate ecommerce, with a 51% increase Q1 2021. 
  • Online spending through Marketplaces like Ebay and Amazon fell slightly compared to Q1 2021.

Source: NZ Post 2022 Q1 ecommerce analysis

What’s on the horizon for ecommerce

For online retailers, the rise in ecommerce is great news! According to an Australia Post report on the latest ecommerce trends, 5.5 million households shopped online in January, which is consistent with the monthly average over the last 12 months, and a positive sign that engagement with online shopping will continue to rise throughout the rest of 2022.

It’s clear that ecommerce business has become the go-to engine of trade, and the continued digital growth has changed how consumers experience retail. People are becoming increasingly discerning about with whom and where they shop, seeking out faster, more authentic online experiences. 

There’s no better example than the explosion of BNPL (buy now pay later) deals across the world. It’s already gained a foothold in Australia, with BNPL transactions predicted to overtake credit card payments for ecommerce by 2024. Along with BNPL, alternative payment methods like virtual shopping and digital wallets are waiting in the wings to offer customers contactless, frictionless payment methods. 

In the fast-moving landscape of online shopping, creating user-friendly experiences, while carving an authentic digital brand identity that’ll increase brand visibility and awareness, is more important than ever. A steady rise in mobile spend also means retailers need to invest in mobile-optimised web pages, user experience (UX) design, and an easy online check-out process. 

These genuine omnichannel strategies, including video, imagery, and other digital assets, will continue to be a vital piece to every retail strategy puzzle. In store sales are sure to slowly gain some traction again, but digital will remain strong. It will never replace the personal interactions you get in store, but will need to complement them in order to create more meaningful experiences for the consumer. Put simply, brands who deploy new digital channels and focus on engaging content creation methods will keep experiencing growth. 


With new brands popping up every day and retail ecommerce spend on the rise, engaging ecommerce content is even more vital and there’s no better time to get on board. Great news…Asset Factory is here to help. Our expert team of creative, fashion, and product photography experts and stylists are on-hand to create incredible content that will enhance your customer engagement, help drive traffic to your ecommerce business, and boost your sales. 

Get in touch with us to chat about your content goals, or to book a tour of our Melbourne studio. We’d love to meet you!