Let’s get quantitive for a moment. YoY Leading economic indicators (LEIs) in the US have been negative every quarter since April 2022.

To “get back to where we were” is, at minimum, a 2H 2024 event. In case you are wondering, LEIs encompass various factors like wage growth, housing starts, interest rates, manufacturing output, etc. I think it is a pretty robust metric.

Taken at face value, the typical online business should expect to see a much softer 2023 holiday season. Consumer spending on services continues to defy gravity, which provides some hope amid the grim outlook.

We studied new signups and cancellation rates across 50 Million users that Redfast processed in September. The following are the clearest indicators that we can directly observe.

- The pace of new signups in September was the lowest in 2023. This could be due to extrinsic factors such as reduced ad spend or cyclicality. However, conversion rates also dropped, which would point to a macro-trend.

- Cancellation rates have ticked up significantly. Across the services and users we measured, cancellation rates range from 5.6% to 18.7%. Many factors drive a site’s cancellation rate, which explains the wide range of values. However, it is worth noting that nearly every service experienced higher cancellation rates in Q3.

We hoped to see a corresponding decline in Google Cost Per Lead, but this has yet to materialize. Where this leaves us is a frustratingly familiar place. High cost of user acquisition combined with lower conversion and lower retention.

The business leaders we polled shared a consistent message:

- Tighten your belts. Be prepared to do more with less. Invest in automation and outsource where you can.

- Increase customer focus and empathy. Don’t pass the buck. Be proactive in detecting site issues, payment failures, and price increases.

- Be aggressive with offers. 10% or even 20% may not cut it anymore. 50% is not that crazy if you have to do it.

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