September 2020 Ecommerce Trend Analysis: Omnichannel Is Here to Stay

Newel Cobb

September 16, 2020

It’s incredible how quickly ecommerce has evolved in just a few weeks. Last month we reported that COVID-19 has pushed ecommerce forward by a whopping 10 years and changed the way key consumers shop. This month we’re seeing exciting updates about how big brands are adapting to these changes and making the playing field more competitive. Let’s talk about it.

Brick-and-mortar Q2 earnings are out, and they’re killing it

Walmart’s U.S. ecommerce sales grew 97% in the second quarter with a 9.3% growth in brick and mortar same-store sales, due in no small part to their grocery services, which have been thriving during COVID-19. Target has done even better: the retail giant saw 60% growth in in-store pickup, 700% growth in drive-in pickup, and an incredible 195% growth in digital sales. Target reports that 92% of their Q2 growth (dotcom and brick-and-mortar) involved a brick-and-mortar location.

US Ecommerce Growth Q2 2020 | Pattern via MarketplacePulse
Screenshot via MarketplacePulse

Similar trends can be seen in the home improvement sector, which has grown robust with consumers spending more time at home. Chain Store Age reports that Lowe’s Q2 same-store sales rose 35.1%, and the Home Depot pulled better-than-expected numbers.

According to CSA, this year marks the first time The Home Depot has posted double-digit comps in seven years, and about 60% of customers’ online orders are being picked up in-store.

More and more retailers are integrating their supply chain, delivery, and ecommerce with their brick-and-mortar stores, and it’s paying off. U.S. ecommerce grew 44.5% in the second quarter—the fastest it's grown in over two decades—and big-box retailers who incorporated curbside pickup and delivery with their dotcom sales grew the fastest.

While we saw a big push for online groceries at the start of the year, we expect to see more brands leveraging their stores as warehouses where customers can purchase products across all categories.

Omnichannel is diversifying

Last month, we predicted that Kroger was cueing up to enter the omnichannel space. Sure enough, Kroger Co. announced mid-August that they’re launching their own dotcom marketplace that will be open to third-party vendors. Kroger is expected “to offer tens of thousands of additional goods, including housewares and toys,” Bloomberg reports.

Kroger isn’t the only company that’s diversifying the omnichannel space. Best Buy announced last month that they’re piloting a new ship-from-store model (similar to that of Walmart and Target) where 250 of their brick-and-mortar locations will be remodeled as “hubs” to ship out more online orders.

More retailers are realizing that to go into the retail war without a dotcom is like trying to win a boxing match without your right or left hand. We expect even more brands to be entering the omnichannel space in the near future.

DoorDash and Uber are pivoting to grocery

Omnichannel is growing so rapidly that brands like Uber and DoorDash, which are not traditionally grocery, are pivoting to dotcom brick-and-mortar pickup to keep up. DoorDash recently entered the on-demand grocery delivery space with its new DashPass service, which allows customers to place orders with participating grocery retailers (i.e. Albertson’s and Walmart) at DoorDash.com or on the app and have their groceries delivered directly to their homes without the need for scheduling.

Uber has seen its food delivery service Uber Eats outpace its core ride-hailing division in growth this year, and they, too, are looking to shift toward that space, showing how lucrative a market it is.

Walmart is making big leaps and changes

Walmart is one of the biggest brands to watch in the grocery pickup space. Last month, Walmart partnered with Instacart to offer same-day delivery in a few U.S. markets, positioning it as a top competitor to Amazon and Whole Foods. Walmart has been in active talks with Uber and Uber-like companies for years to transition to grocery delivery, and this new partnership with Instacart has closed the last mile for Walmart in a way that Amazon has yet to achieve.

Walmart has already overtaken Amazon in the grocery market share by transaction count, according to the TABS Analytics’ 8th Annual Food and Beverage Consumables Study. Walmart snagged a 30% share of online food and beverage transactions this year, pushing it ahead of Amazon for the first time in the study.

Another big thing to watch from Walmart is their platform Walmart+, which just went live this month. Walmart+ is a membership service offering free, unlimited-same day delivery on groceries, fuel discounts, and access to Walmart’s new Scan & Go service for $98 a year. While Walmart claims Walmart+ is not an Amazon Prime rival, its same-day delivery services and cheaper yearly subscription may prove to be a force to reckon with for Amazon.

The biggest surprise coming from Walmart this month is that they’ve teamed up with Microsoft in a joint bid to acquire TikTok. Ecommerce giants are increasingly looking to video streaming as a powerful force in online retail, and Walmart appears driven to get ahead of the trend. It also signals Walmart’s desire to reach younger consumers and make them comfortable with the brand.

Amazon will not be left behind

While Walmart is making big gains in the ecommerce space, Amazon is coming in swinging. Last month we learned Amazon is in talks with Simon Property Group Inc., the biggest mall owner in the United States, to convert anchor department store spaces (former J.C. Penney’s and Sears) into Amazon fulfillment centers. We predict many of these mall locations may house Amazon’s newest grocery label Fresh in an attempt to close the last mile in grocery pickup services and compete with Walmart.

Amazon Fresh stores will streamline the grocery shopping experience with features like Alexa aisle navigation and the Amazon Dash Cart, which allows customers to skip the checkout line and purchase their items simply by placing in their cart. It’s evident Amazon is working hard to increase their presence in the grocery space.

Meanwhile, Amazon’s dotcom offerings continue to expand. ShipMatrix reports Amazon shipped 66% of its own packages in July compared to 61% between April and June. It’s estimated they’ll potentially reach 80% by next year, giving Amazon a logistical edge to companies like Walmart that have yet to incorporate self-shipping.

Ecommerce growth is great right now, but many fear it won’t last

Retailers are reporting some of the biggest ecommerce gains in their history—Best Buy, for example, saw online sales grow by 242% during Q2—but there are concerns that when the pandemic comes to an end, the bubble will burst.

Walmart and Target largely attributed boosts in online sales to the 160 million stimulus checks distributed during COVID-19. Without the passage of a second stimulus, retailers like Walmart believe their sales will drop (they’ve already seen sales decrease as checks have tapered out).

That said, we’ve hit the point of no return for ecommerce

Ecommerce is a thing of the now, not the future, and its target demographic is growing along with the brands using it.

One example is baby boomers. Pre-COVID, boomers made less than 50% of their purchases online. Now 2/3 buy online via in-store pickup or curbside pickup, and more than 1/4 use Amazon Prime or another ecommerce delivery service. The biggest reason is convenience. Boomers are expected to continue using ecommerce long after the pandemic ends, giving brands one more reason to invest in it.

How will the holidays be affected this year?

UPS and USPS shipping rates are expected to increase later this fall as the pandemic stretches onward, but more customers than ever are anticipated to make online purchases. 44% plan on shopping online more during this year’s Black Friday, Cyber Monday, and Christmas holidays compared to last year’s holiday season. Fluent projects we’ll see a 73% increase in those who shop exclusively online.

The biggest takeaway from the last few months is that ecommerce isn’t just a phase for the U.S. economy. It’s here to stay. If your brand isn’t already looking at omnichannel and dotcom sales, yesterday was the time to get on top of it.

Reach out to us today to get a free demo of our services and see how Pattern can help you launch a successful omnichannel ecommerce strategy.

Explore Our Ecommerce Resource Library

Find relevant content to accelerate your ecommerce business. Stay on top of industry trends and best practices.

Sept 27, 2022

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)
Sept 26, 2022

Top 5 Ways to Prepare for Peak with Google Ads

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.

1. Go Early

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.

2. Get Ready for Privacy Changes

 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.

3. Ensure Consumers Can Discover your Brand

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)

4. Get Moving with Performance Max

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.

5. Flight Budgets Accordingly

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.

Sept 20, 2022

4 Ecommerce Consultant Must-Haves

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. 

What is an Ecommerce Consultant?

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.

1. Brand Obsession/Specialization/Passion

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. 

2. Proven Results

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.

3. Wide Range of Marketplace Expertise

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.

4. Network of Resources

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.

Achieve Your Ecommerce Goals With Pattern

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.