The headline numbers looked great. The story underneath them is more complicated, and more important for your retention strategy.
Q1 2026 is in the books, and if you glanced at the top-level metrics, you probably felt pretty good. Gross merchandise value climbed. Average order values ticked up. Text messaging had a breakout quarter. By the usual scorecards, the start of the year was a win.
But a closer look at the data, drawn from Klaviyo's Q1 2026 Commerce Trends Report, which analyzed activity across 10,000 leading brands and retailers, reveals something more nuanced. Beneath the growth, consumer behavior is shifting in ways that should reshape how brands think about pricing, retention, and channel strategy for the rest of the year.
Here's what stood out, and what it means for brands focused on building lasting customer value.
Revenue Is Up, but Volume Isn’t Driving It
Overall, GMV grew 9% year over year in Q1. That’s a solid number on its own. But when you break it apart, the picture gets more complicated.
In the US, average order value rose just 1.7%. That modest bump masks two opposing forces: the average selling price per item jumped 8.7%, while units per transaction fell 6.4%. In plain terms, shoppers are spending slightly more per order, but only because each item costs more. They’re actually putting fewer products in their carts.
This pattern wasn’t confined to the US. The same dynamic played out across the UK, Australia, and New Zealand. Consumers globally are responding to rising prices by trimming their baskets. The AOV growth that looks healthy in a dashboard summary is largely a function of inflation, not increased purchase intent.
For brands that have built their merchandising and upsell strategies around multi-item carts, this is a signal worth heeding. The “add one more” playbook works differently when customers are already stretching to cover what’s in their cart.
Shoppers Are More Deliberate Than Ever
Another revealing data point: product views per ordered product climbed across verticals during Q1. Consumers are browsing more pages, comparing more options, and taking longer to commit before hitting “buy.”
When every purchase feels a bit weightier, the research phase naturally expands. Shoppers want to feel confident they’re making the right call, and brands that can surface the right product, at the right moment, with content that feels personally relevant are the ones compressing that browsing into conversion.
This is exactly where data enrichment changes the equation. When you know more about who your customers are, including their demographics, lifestyle, life stage, and interests, you can serve product recommendations and content that match what they’re actually looking for, rather than hoping a generic experience does the work.
In a quarter where the consideration cycle is stretching longer, the brands with richer customer profiles have a real structural advantage.
Text Messaging Had a Breakout Quarter
If there’s one unambiguously bright spot in Q1, it’s text messaging. According to Klaviyo’s report, revenue driven by SMS grew 17.5% year over year, nearly double the overall 9% growth rate. Email grew at 10.4%, and all other channels came in at 8%.
The standout performance wasn’t limited to one customer segment. Text outpaced every other channel for both new and repeat buyers. Among repeat shoppers specifically, text-driven revenue growth exceeded 20%.
The underlying reason is straightforward: text reaches people in a space with far less noise. There’s no algorithm filtering delivery, no promotions tab to get lost in. But here’s what’s easy to miss in the headline number. The brands seeing the strongest SMS returns aren’t just sending more texts. They’re sending better texts, powered by richer data about who their customers are and what they care about.
A generic promotional blast to your full SMS list is a fast path to opt-outs. A personalized message that reflects a customer’s preferences, purchase history, and lifestyle? That’s the kind of text that drives the 20%+ repeat buyer growth, Klaviyo reported.
Personalization Is Delivering Real Revenue
Personalized experiences had a standout quarter. Revenue per session from personalized content more than doubled between December 2025 and March 2026, climbing from $1.12 to $2.64. Meanwhile, pageviews per session held essentially flat at around 2.7 to 2.8.
That combination matters. Shoppers engaging with personalized experiences aren’t just browsing more; they’re converting at meaningfully higher rates per visit. In a quarter where consumers are being pickier about what they buy, relevance is the difference between a session that converts and one that doesn’t.
But personalization is only as strong as the data behind it. Most brands are working from a limited picture of their customers: purchase history, email engagement, and maybe some on-site behavior. That’s a start, but it leaves enormous gaps. You can’t personalize around life stage, household composition, income level, or lifestyle interests if those data points aren’t in your customer profiles.
This is the problem LaunchPad was built to solve. By enriching your Klaviyo profiles with 25+ demographic, behavioral, and lifestyle data points, you move from basic segmentation to genuinely individualized experiences, the kind that drove that $2.64 revenue-per-session figure in Q1.
The Acquisition-Retention Gap Is Widening
Perhaps the most important trend to watch from Q1 is what’s happening with discount economics. According to Klaviyo’s analysis, new buyer discount rates rose a full percentage point during Q1, from 9.8% to 10.8%. Brands are giving away more than ever to win first-time customers.
Meanwhile, repeat buyer discounts actually edged down, from 12.1% to 11.7%. On the surface, pulling back on repeat buyer promotions might look like smart margin discipline. But in context, during a quarter where shoppers are becoming more cautious and deliberate, reducing investment in retention while pouring more into acquisition is a risky trade.
The math here is unforgiving. If it costs more to acquire a new customer and product margins are tightening, the only way to grow profitably is to increase the lifetime value of the customers you already have. That means understanding them better, personalizing their experience, and giving them reasons to come back that go beyond a discount code.
Brands that invest in knowing their customers deeply, not just what they bought, but who they are, are the ones best positioned to build retention that doesn’t depend on deeper and deeper discounts.
What This Means for the Rest of 2026
Q1 was a quarter of contradictions. The topline metrics pointed in one direction while the underlying dynamics pointed to another. The brands that will thrive in the coming quarters are the ones reading both signals and adjusting accordingly.
A few themes to carry into your planning:
- Text messaging has graduated from experiment to essential channel, and the data makes it hard to justify treating it any other way. But the channel's ceiling depends on message quality, which depends on data quality.
- Personalization isn’t a nice-to-have. It’s a revenue lever that’s producing measurable returns. The brands seeing the strongest results are the ones feeding their personalization engines with richer, more complete customer data.
- AOV growth fueled by price increases rather than volume is fragile, and strategies built around it will face harder comparisons as the year progresses.
- The widening acquisition-retention gap is a vulnerability that smart brands will close with deeper customer understanding, not more promotions.
The consumer hasn’t stopped spending. But they’ve become more intentional about where, how, and how much they spend. The brands that meet that intentionality with genuine relevance, powered by data that goes beyond what’s in their transaction logs, are the ones that will come out of 2026 ahead.
About LaunchPad
Build next-level retention and reactivation campaigns on your existing email, automation, or marketing platform. A LaunchPad Customer Profile Append adds 25+ fields of demographic, interest, and buying behavior data to your customers on any of these platforms so you can create advanced segmentation, campaigns, and workflows.
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