In the world of COVID-19, the ecommerce world has become a beast that’s increasingly difficult to tame. If you’re a decision-maker working in ecommerce, how can you accurately strategize when it seems like every week there’s something new thrown your way, changing consumer behaviors and impacting your revenue growth?
Enter Pattern Trend Analysis. This new series will keep you in the know when it seems like the world is literally turning upside down.
For example, for eleven weeks straight, “facemask” has been the number one search term on Amazon. Although this illustrates a simple change in consumer habits, the effects of COVID-19 go far beyond Amazon search patterns. In a matter of months, COVID-19 has leapt ecommerce forward by a couple of years. As the industry evolves faster than it ever has before, it is important to keep up with the trends. Let’s dive in.
Lockdown or no lockdown, a significant portion of consumers are likely to avoid public spaces until the pandemic recedes, or better treatments are developed. This has been an ecommerce wake-up call for several brands.
In under 30 days, PepsiCo internally developed and launched two D2C sites, PantryShop.com and Snacks.com. Microsoft abandoned their stores all together, closing all 83 physical locations. Even brands like Lululemon doubled down on ecommerce by purchasing Mirror, a Peloton-like service that acts as a virtual gym. If you are selling products to consumers, I recommend evaluating how you view brick and mortar vs. ecommerce.
As the market scrambles, you may be wondering how the big players are reacting. Online grocery sales will increase 58.5% this year. In a surprising twist, Instacart outperformed Walmart in online grocery, causing Walmart’s online grocery share to drop approximately 25% while Instacart grew to 57% market share. This is likely because of Walmart’s inability to meet higher COVID demand. Personally, I waited for over an hour for Walmart grocery pickup just a couple of weeks back. Online grocery is the new gold rush.
Traditionally, Amazon has delivered on grocery through their Whole Foods fulfillment arm. Since March, Amazon has expanded the capabilities of that arm by 160%. They are also looking to expand their logistics capabilities, announcing the purchase of a self-driving car startup, Zoox. They are also testing independent shipping services across the globe.
Amazon has been front and center of this online growth. Pattern previously reported that Amazon experienced a 24% sales increase during Q1. Amazon understands they must act to stay ahead. This last week, Amazon started experimenting with search query Prime branding (image below) for grocery products.
Pattern Senior Brand Manager Clark Kleinman often finds himself in the middle of Amazon beta Tests.
“Amazon is always A/B testing new ways to convert shoppers. This image shows one new example of this,” Kleinman said. “Customers can exclude non-Prime results directly from the search drop-down. This shows up even on accounts without paying a Prime subscription.”
The pandemic has not been all good news for Amazon. In the beginning of ecommerce, Amazon separated themselves from sites like eBay by implementing the Buy Box. The idea is simple, to prevent out of stocks, and encourage lower prices, multiple sellers can sell on a single item page. The seller with the best customer offer gets the Buy Box. If they are out of stock, the Buy Box goes to the next best seller.
Price gouging When the brand 3M sold out of facemasks, the Buy Box went to the next lowest offer. Unfortunately for both 3M’s brand image, and the consumer, the next lowest price was 18X higher than the original list price. Clearly price gouging, the other seller sold over a hundred-thousand dollars in masks. 3M responded by suing the seller in federal court. Amazon responded by implementing their price gouging policy. If you sell an “essential product” and increase the price by more than just a few percentage points, you can expect a notification from Amazon and possible product removal.
Counterfeit goods With more people selling and shopping online, the Buy Box has also led to multiple fake products being sold on Amazon. Amazon understands that this can hurt their brand. In the last couple of weeks Amazon has set up a counterfeit crimes unit which will work with law enforcement to take on fraudsters. Many praised Amazon for finally making this move.
Corey Lord, a former law enforcement officer and current Pattern Senior Project Manager, thought this initiative was interesting but was hesitant to give praise.
“My initial thought is that this seemingly grand gesture will end up being pretty hollow,” Lord said. “Law enforcement agencies have plenty to do, these ‘cases’ will sit in limbo. It feels like the buck is being passed.”
The increase in COVID-19 shoppers has hurt Amazon in other ways, mainly logistic capabilities. During the first few weeks of the pandemic, items being sent into Amazon experienced heavy delays. Amazon eventually stopped accepting non-essential items all together. These embargos lasted weeks and caused stockouts across the site. Essential items were less affected. Non-essential items experienced early 2000s like shipping delays (5-9 business days).
In an effort to manage COVID-19 and logistics, Amazon has pushed back Prime day from July to September to possibly October now. Plus, CNN reported that, “We're going to have to face the harsh reality in some states that we may need to shut down again.” This could mean that Amazon may experience heavy delays throughout the rest of the year. If you plan on running Prime Day promotions, we recommend you have your inventory in Amazon by mid-August. For Black Friday, the sooner the better.
The last few weeks have greatly affected ecommerce on social media. Facebook formally launched their Facebook for Business, branding it as a storefront for closed brick and mortar across the country. If you are an Amazon brand, you likely saw targeted Facebook for Business ads on Linkedin.
Strides aside, it has not been all good news for the social media giant. Multiple companies chose to pull their ads from Facebook through the end of the year, citing the platform’s divisiveness during the current political climate. These companies include Unilever, Coca-Cola, Starbucks, and others. TikTok may look prime to take those ad dollars as they’ve just launched their TikTok for marketers platform, but I predict that the spend will flow onto major ecommerce platforms like Amazon, Instacart, and Walmart. You can expect higher ad prices on Amazon and lower prices on Facebook.
As the world of ecommerce accelerates, come back here each month to stay in touch with the latest trends you need to know to grow your ecommerce business. Looking for more personalized expertise? Contact us today.
Find relevant content to accelerate your ecommerce business. Stay on top of industry trends and best practices.
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.