These are the Top Online Data Trends for Investors in 2024

Which trends can investors expect to dominate in 2024, according to online data? We had the chance to speak with Or Offer, CEO, and Jeremy Scott, Director of Research, Investors, from Similarweb (SMWB), to hear what digital trends investors should be paying attention to for 2024. Similarweb crunches data to find out what are the next big things to happen in the investment world. They can look at disruptive patterns around the globe at any given time, enabling them to track trends in real time.

Similarweb’s products help investors by tracking millions of websites and billions of pages of data, allowing them to unlock unique pieces of information, from SaaS user seats, to travel, to the impact of AI. The insights they bring today come from a vast collection of data, highlighting some of the most important trends for investors looking at the market in 2024. Here’s what they had to say.

Parts of the interview have been edited for length and clarity.

Trend 1) Ongoing pressure on discretionary spend

If you are looking at a company like Booking.com (BKNG), Airbnb (ABNB), or Expedia (EXPE), there’s no cleaner barometer on the health of the global consumer than travel and entertainment. We are aggregating 600 of the largest platforms into an index, and what we’re seeing is ongoing pressure – it’s occurring in nearly every region. The most impacted area that we are seeing is at resorts, destinations, and entertainment. Within a sector that’s largely discretionary as a whole, we’re seeing the most acute pressure, in the most discretionary of those categories.

This really tells you that consumers are saving, they’re preparing for a tougher period, and conversion rates are down across the board. This is a universal trend that we’re seeing across the space, and travel is where it’s the most acute. We did actually have an uptick earlier in the year, so there was some hope that things may have been recovering, but that has since ceased. Part of that is just the accumulated impact of inflation.

Trend 2) Seat contraction driving down enterprise SaaS spend, but SMB trends are looking stable 

When it comes to SaaS (Software as a Service), we track unique activity on roughly half a million enterprise accounts, and what we have is a lot of the impact of the budget cuts, which really started in earnest about two years ago, ramped up last year, and they’re continuing to take their toll on growth. So, while the market has punished more of the SMB (Small to Medium Business)-oriented names like HubSpot (HUBS) or Freshworks (FRSH), what we’re actually seeing is more pressure coming from the larger enterprise accounts.

Some of the most negative impacts on Adobe (ADBE) or Salesforce (CRM) are starting to flow through, and we’re continuing to see large enterprise pull back on their budgets for SaaS this year. For smaller to medium size businesses, the trend is neutral and stabilizing, which is actually surprising. Given this is a tougher environment for startups, tougher environment for SMBs, from the perspective of spend on platforms, it’s actually stabilizing.

Trend 3) Flight to marketplace in e-commerce

When it comes to Shopify (SHOP), Amazon (AMZN), and other big commerce, one of the structural trends we’ve seen in the last five years has been the surge in DTC (Direct to Consumer) e-commerce. It’s really been powered by, first the pandemic, but also just the investment in infrastructure and fulfillment have really helped to drive that. Those trends have started to reverse course. Shopify’s had some trouble with getting fulfillment up and running. The DTC growth premium to marketplaces if effectively gone, and we think this is price driven. Marketplaces are often cost leaders in a category, and if consumers that are feeling inflationary pressure, the cost leaders will start to outperform the DTC.

If you are starting your search, say looking for bedsheets, and you start on Amazon vs. starting somewhere else, you might have a different experience, with different costs or initial price points. We’re seeing that the marketplaces are attracting more customers because of the flight to cost leadership, knowing that you’re probably going to get the best deals in a marketplace environment vs. going to individual brands.

Trend 4) Platforms are seeing the most pressure from surge in AI applications

We’ve been not only monitoring the growth in AI (Artificial Intelligence) platforms, but also what’s really on the mind of investors, and that’s what is likely to be most impacted. We’ve been tracking that web builders and design platforms have been a source of weakness.  Now this impact has been compounded by a software backdrop. If today you’re building a website, or you’re designing an app for the first time, the avenues you’re going to pursue are vastly different than what they were even a year ago. The number of tools that it would take just to get that basic development design is staggering.

On the whole, there’s been a pretty significant slowdown on the web builder side. We’ve seen pullbacks with Wix (WIX) and GoDaddy (GDDY), and even Shopify. We even saw that Envision, which was once valued at $2B, is now shut down. It’s just evidence that the speed at which we’re seeing AI effect markets in a weakened state is likely to speed up. The impact here is that the weak likely get weaker in 2024.

Data Trends – Key Takeaways

There are several key takeaways we can learn from Similarwebs online data. For one, while investors prepare for the market in 2024, they should be aware of continuing pressure on consumers discretionary spending, particularly where travel and entertainment are concerned. Another trend is that Amazon continues to dominate the e-commerce marketplace, challenging DTC companies as consumers focus on finding the best deal for their dollar.

The third major trend is that larger enterprises are feeling the pressure when it comes to SaaS spend, but the small to medium size businesses are seeing stabilization. Lastly, while AI platforms boom, there are certain sectors that are being impacted negatively by this, as AI replaces the need for some of their services. Investors can utilize these insight to seek out opportunities, and even avoid downturns, as the 2024 year kicks off.

Watch the whole interview here – https://youtu.be/9E2HQjMbkRI