Last year’s ecommerce trends were unlike anything we’ve ever seen before. Compounded with Covid-19 restrictions that pushed more consumers to shop online, the already steadily thriving ecommerce industry made huge gains in 2020, and the horizon for digital sales is looking more promising (and competitive) than ever.
So what did 2020 look like for ecommerce? We’re here to break down all of the ecommerce trends to keep in mind for 2021.
A quick look at ecommerce growth data shows you just how well the industry is doing. For the past 10 years, ecommerce was growing an average of 15% year-over-year. In 2020, it grew over twice that number.
U.S. ecommerce grew 32% in 2020 to reach $790 billion—that’s up from $598 billion in 2019! Ecommerce also represented 14% of total retail spending in 2020. Again, for comparison, it only represented 11.3% in 2019.
The market peaked during the second quarter, when widespread lockdowns led to brick-and-mortar store closures, restricted hours, and a ballooning need for online goods and curbside delivery. MarketplacePulse reported that Q2 ecommerce saw a 16.1% share of retail sales. As businesses adjusted to mask and social distancing measures and shoppers could safely return to in-person shopping, retail spending recovered and ecommerce percentages decreased.
The holidays also saw unprecedented sales numbers for ecommerce businesses. Total holiday retail spending surpassed $1 trillion for the first time in 2020, and ecommerce sales alone grew 32.5%. Cyber Monday 2020 was massively successful. It was the largest online spending day in history, rising 15.6% to $10.78 billion. Insider Intelligence reports that Black Friday sales increased 22% to $8.92 billion, while Thanksgiving sales rose 21.4% to $5.02 billion.
Ecommerce trends for 2020 are also interesting outside of the U.S. Latin America saw stand out ecommerce growth last year (36.7%), with North America, Central & Eastern Europe, and Asia-Pacific following. It’s a good reminder that the international ecommerce field is ripe with opportunity for U.S. brands wishing to grow even more.
The upward trend in ecommerce growth isn’t expected to stop, though less dramatic increases are expected with vaccine rollouts and a more predictable market in 2021.
So, what are the ecommerce trends your brand should be aware of?
2020 was a challenging year for businesses, with many experiencing inventory issues, closures, and significant adjustments to marketing and sales to meet a new retail landscape. While some of those same challenges carried over to online marketplaces—you might recall that Amazon saw significant delays and inventory issues last spring due to the Covid-19 pandemic—marketplaces overall saw exciting growth.
In spite of shipping and inventory issues, Amazon was the biggest winner, growing significantly during initial lockdown periods and with greater fulfillment capacity than its competitors. Amazon’s annual revenue increased 38% to $386 billion—an increase of over $100 billion year-over-year—and the company’s net profit was up 84% in 2020 compared to 2019. That’s a lot of Benjamins.
Amazon’s Sponsored Brands saw exceptional growth during Prime Day promotions, which were postponed from the summer to October 2020 due to the pandemic. Markle reported that advertisers who ran deals on Prime Day saw a sales lift of 240%, which outpaced their spend increase by 210%. Amazon continues to prove they aren’t going anywhere.
Smaller marketplaces are also thriving beyond 2020. Walmart surpassed eBay to become the second largest ecommerce marketplace—its revenues grew $35 billion in 2020—and, for the first time in its history, Target leaped into the top ten ecommerce marketplaces, landing a position at number seven. The company made over $13 billion in sales in 2020, a 104% year-over-year change from 2019.
Both Walmart and Target have seen large returns due in large part to their investment in curbside pickup and same-day delivery options. These are two trends that are not expected to go away in 2021, as they’ve been met with a largely enthusiastic response from shoppers.
Target is an especially fascinating example. In January 2021, they reported that their same-day shipping services—Drive Up, Order Pickup, and Shipt—grew a combined 193% during the holiday season. Nearly $700 million of those sales came from their Drive Up service alone, which increased 500% year-over-year from 2019, and those sales didn’t negatively impact their in-store pickup. In fact, in-store pickup increased more than 50%.
Customers are looking for safer, more convenient, and more diverse ways to make their purchases in 2020 and 2021, and the pulse of the industry seems to suggest that faster shipping, digital selection, and easy pickup services will continue to do well.
There were several “pandemic shopping categories” that emerged as leaders in the pack in 2020. Essential goods, in-place entertainment, and home projects saw a record-breaking year. But, the biggest standout category is grocery.
Before the Covid-19 pandemic, many stores were already building out their grocery order pickup and delivery capabilities. It has, until recently, been a relatively small niche in the grocery industry, but a growing one. During the pandemic, however, data shows that the popularity of online grocery exploded.
In August 2019, U.S. online grocery sales totaled $1.2 billion. By June 2020, that number was $7.2 billion, with a massive 79% of U.S. consumers turning to online grocery after the outbreak of the pandemic.
A study by PwC Global found that 63% of respondents are buying more groceries online or by phone now than before social distancing, and 86% of respondents are likely to continue to shop online for groceries when social distancing measures are removed.
With expanded curbside and delivery options, online grocery is expected to carry that momentum with it into 2021 and beyond. Business Insider reported that online grocery is expected to reach 55% of U.S. consumers by the end of 2024.
Online grocery isn’t just good for grocery. With the ability to add products from other categories to groceries in an online cart (i.e. Walmart.com), the shopping experience has become more convenient and efficient for marketplace consumers across the board.
Omnichannel strategies continue to be an important trend for brands in the ecommerce industry looking to expand. With more customers shopping online, the importance of having a cohesive and consistent brand across a diversity of channels, including marketplaces and social media, is greater than ever.
Two platforms that are particularly interesting right now are Instagram and TikTok. Instagram surpassed 1 billion global users in 2020, and it continues to build upon its Reels and Stories features in ways that brands can leverage for their ecommerce.
According to Markle, Instagram Stories ads generated 35% of impressions and 29% of total Instagram ad spend for brands. It’s anticipated that advertising features on Reels will be available to brands in the near future.
Instagram, more than any other social platform, is the platform shoppers are turning to to follow brands, and not only is it a popular B2C platform, but it’s growing in popularity for B2Bs who are wanting to raise awareness of their brand as well.
TikTok is the interesting newcomer in this space. The app saw explosive growth in 2020, and marketers, once distrustful of the app, are now paying close attention. Last fall, TikTok and Shopify announced that Shopify merchants can now create and run TikTok campaigns within the Shopify dashboard. The app has also added ecommerce-focused ad units, like a dynamic catalogue, that are attractive to brands. Marketers are expected to spend more on the app this year as it continues to expand its ecommerce features and dominate in the social video space.
Overall, focusing on the end consumer is a big key in ecommerce. This year, focusing on finding where your target customer already is, and then showing up with convenience and support. No matter who your audience is, they can’t purchase your product offering if they don’t know about it. But, don’t neglect traditional channels in pursuit of new ones, maintain a balanced omnichannel strategy to keep both existing and potential customers happy. Not sure how to manage an omnichannel strategy effectively? We’d love to help.
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Peak season is almost upon us and with all signs pointing to it starting earlier than ever, with Christmas gifting searches now ramping up in August and September, it’s time to start preparing for peak. In this article, we’re sharing our top five tips for planning and preparing for peak season with Google Ads and the strategies required to get your Paid Search ready so you can drive success over this crucial period.
In 2021, gifting search terms started increasing in popularity in August. The general trend is that people are looking, researching and weighing their options early, so it’s best to start your Paid activity early to ensure that you’re capturing that early research traffic. This will help drive revenue alongside aiding those consumers who are in their research phase.
From 2020 to 2021, spend during Cyber Week actually only rose 2% but in the weeks leading up to it, it increased by 16%. However, Cyber Week is still the biggest period during the latter half of the year, accounting for 23% of all online spend by consumers over peak. Being prepared and starting early will help you to maximise your time during this period.
According to Google, 48% of global consumers have stopped buying or using a service due to privacy concerns. Privacy is front of mind when consumers are shopping online and we know that Google is phasing out 3rd party cookies in 2023. This is going to make it much harder to track users online and it’s something that brands need to think about this now – waiting isn’t an option.
From a Google Ads point of view, you want to ensure you have set up the Google Ads tag across your site and have enabled ‘Enhanced Conversions’, which ensures all conversions are tracked and allows you to monitor other actions such as ‘Add to Cart.’ This is relatively easy to set up, especially if you use ‘Google Tag Manager’.
It’s also vitally important that you build up your first-party data during this time as this is data you own and it can be used when targeting consumers that have provided your brand with their email address. Pattern’s own experience shows that by segmenting and using first-party data, you can see a 10% improvement in revenue and ROI.
A full-funnel approach is now more important than ever as consumers become more discerning and have more choices than ever of where to shop.
Pattern has seen success with Google Ads’ ‘Discovery Campaigns’ (image-based ads that appear on Google platforms such as Gmail and the Google app), which have driven success both from a traffic and revenue perspective.
The performance of these campaigns is significantly enhanced by adopting a segmented and nuanced approach to first-party data and incorporating these into your campaigns. Other options for a full-funnel approach include YouTube and testing bidding on keywords that are more representative of the research phase. (e.g. ‘best baby clothes’ for a baby clothes brand)
Earlier this year, Google announced that they were moving away from Smart Shopping and launched Performance Max. This is a new campaign type that incorporates features and placements from Smart Shopping but expands them onto other platforms such as Gmail but also alternative creative options, such as images and videos.
Since Google has already started automatically upgrading Smart Shopping campaigns to Performance Max, expect to see some fluctuations in the first 2 weeks following the switch over but results generally seem positive. We recommend upgrading sooner rather than later to limit any potential impact to peak period.
Peak period will be even more competitive than in 2021 and you’ll need your budgets to support this period, we recommend boosting budgets in October to start capturing that early peak traffic. As we enter November and the Cyber Period, start early and make sure you are capturing those consumers looking for early bargains, ensuring you are being nimble in your optimisations and reacting to the data that you are seeing.
Overall, peak period is vital to help drive your sales and by preparing early, you will see strong results and drive success for your brand. If you want to discuss how your brand can navigate this next peak period, contact us to discuss your options with our performance team now.
Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces.
Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.
So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.
Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products.
An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.
An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.
Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.
At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services.
It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.
It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.
The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.
Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces.
With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.
Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.