At first glance, Q1 2026 looks like a win. Revenue is up. Average order value (AOV) is up. Text messaging is on a tear. If you stopped at the dashboard summary, you'd pour yourself a coffee and move on to Q2 planning feeling great.
Don't do that yet.
Underneath those topline numbers, the economics of how people shop are shifting. Product costs are climbing. New buyer discounts are creeping higher. And the brands that read Q1 as "business as usual" are going to be the ones scrambling in Q3 when the math catches up.
This is a quarter that rewards the people who look past the surface.
Text messaging revenue grew twice as much
Let’s start with the bright spot, because it's a genuinely big one. Text messaging revenue grew 17.5% YoY in Q1, nearly double the overall growth rate of 9%. Email came in at 10.4%. Revenue for all other channels grew 8%.
This wasn't one segment carrying the channel. Texting outperformed across new buyers and repeat buyers. For repeat shoppers specifically, text message revenue growth topped 20%.
There's a simple reason: texting reaches people where they're already paying attention. No algorithm between you and the customer. No inbox tab to get lost in.
Brands leaning into text messaging as a core retention channel, not a novelty add-on, are seeing it in their revenue. If that's not your approach yet, the data is hard to argue with.
Personalization is paying off, literally
Here's another number that looks good and actually is good: personalized revenue per session climbed from $1.12 in December 2025 to $2.64 in March 2026. Over that same timeframe, pageviews per session held nearly steady at 2.7–2.8. That means shoppers aren't just browsing personalized content. They're buying it.
In a quarter where shoppers are being more selective about what they cart and buy, relevance is the differentiator. Brands serving experiences tailored to the individual are converting at higher rates per visit because they're showing people what they actually want.
Shoppers are paying more and getting less
AOV ticked up in Q1. That's the number most teams celebrate. But let’s pull the thread: in the US, AOV rose just 1.7%. Average selling price per item surged 8.7%. Units per transaction dropped 6.4%.
Read those 3 numbers together and the picture changes. Shoppers aren't spending more because they're buying more. They're spending more because each product costs more, and they're compensating by buying fewer of them.
This isn't a US-only pattern. The same dynamic showed up in the UK and in Australia and New Zealand. Product costs are rising, and shoppers everywhere are adjusting the same way: smaller carts, higher price tags.
For your business, this means the levers you're used to pulling may not work the way they used to. Bundling strategies built for 3- to 4-item carts hit differently when the average is trending toward two. Up-sell flows designed around "add one more" face a customer who's already stretching their budget on what's in the cart.
New buyer discounts are climbing. Retention investment isn’t keeping up.
If product economics are shifting, you'd hope the customer economics would hold steady. They're not.
New buyer discounts rose a full percentage point in Q1, from 9.8% to 10.8%. That's a 10.4% YoY increase in what brands are giving away to get someone through the door for the first time.
Meanwhile, repeat buyer discounts edged down from 12.1% to 11.7%. On the surface, that looks like discipline. But zoom out: brands are spending more to acquire and less to retain, often without a loyalty or repeat purchase program absorbing the difference.
That gap is a risk. The brands pulling back on repeat buyer investment during a quarter when shoppers are already becoming more cautious are the ones most likely to see retention rates soften by Q3.
Shoppers are browsing harder before they buy
One more signal worth sitting with: across verticals, product views per ordered product edged higher in Q1. People are looking at more items before they commit.
In a world of rising prices and smaller carts, that tracks. Shoppers want to feel confident before they spend. They're comparing more, deliberating longer, and clicking through more product pages per purchase.
The consideration cycle is getting longer, not shorter. And that means the brands that make it easy to decide, through smart product recommendations, reviews, personalized content, and clear value propositions, will convert that browsing energy. The ones that don't will watch sessions get longer while conversion rates stay flat.
The uncomfortable truth about Q1
Q1 2026 was a strong but deceptive quarter. The topline numbers—revenue up, AOV up, text messaging booming—all point in the right direction. But the forces behind those numbers are moving in ways that should change how you plan the rest of the year.
Shoppers are becoming more deliberate. Acquisition costs are rising. The brands that looked great in Q1 because of price inflation, not volume growth, will face harder comparisons by summer.
And the winners? They're already shifting their strategies:
- They're building text messaging into their core retention strategy, not testing it as a side channel. Texting revenue grew nearly twice as much as overall channel revenue growth, and repeat buyer text message marketing growth is even stronger.
- They're investing in personalization as a revenue driver, not a nice-to-have - and shoppers are responding with strong engagement..
- They're segmenting discounts by shopper type. A flat promotion calendar doesn't work when new buyer and repeat buyer economics are diverging this clearly. Brands should consider specific incentives targeted for new versus repeat buyers.
- They're planning beyond BFCM. Every vertical has its own seasonal peaks. Waiting for the holidays means missing months of high-intent shopping.
- They're shortening the consideration cycle with data. More browsing per purchase is an opportunity, not a problem, as long as you can serve the right recommendation at the right moment. Product recommendations, personalized content, and social proof can compress a 6-pageview session into a 3-pageview conversion.
Q1 told you everything you need to know about how shoppers are changing. The only question is whether you'll adjust before the brands around you do.
Disclaimer: This analysis is based on the Klaviyo Insights Q1 2026 Flash Report, examining same-site shopping and marketing activity across a cohort of top GMV-producing Klaviyo customers, with YoY comparisons to Q1 2025. All data is anonymized and aggregated.
Related content
