It’s old news that ecommerce has changed as a result of COVID-19, causing new trends to emerge and a surge in online grocery. And while some ecommerce platforms were already in the process of introducing innovations to their platforms that happened to coincide with the pandemic (we’re looking at you, Walmart Fulfillment Services), all ecommerce platforms have had to think on their feet.
Here, we’ve gathered all the need-to-know information on innovations different marketplaces tried (and occasionally failed) in the first quarter coinciding with the pandemic, how things went, and what the future of ecommerce on these platforms looks like for now.
It’s easy to say that Amazon has led out when it comes to ecommerce marketplace response to COVID-19, with a 24% increase in sales just Q1—its fastest growth in four years.
Initially, like every other platform it seemed, Amazon was overwhelmed by demand for items like masks, hand sanitizer, and so on. Amazon’s response to the pandemic was to first suspend shipment for “nonessentials” in mid-March, lifting the suspension for all items last month, and its grocery feature has seen a lot of demand—which is great, but only if Amazon can keep up with supply. At the beginning of April, went as far as removing its deals page, product recommendations, and “frequently bought together” to encourage shoppers to buy less.
However, Amazon has since recovered from all of these setbacks, bringing back the deals page, product recommendations, and fast shipping for non-essentials.
What will really determine Amazon’s success, it seems, is how it treats its workers—without them, the system doesn’t run, and Amazon continues to make headlines about safety for warehouse workers, with workers testing positive for the virus and at least one death.
This isn’t the first time Amazon has dealt with controversy over labor conditions, and it seems doubtful that people will stop relying on the ecommerce giant to deliver necessities out of moral obligation. However, if Amazon’s workers continue to protest, breaking down Amazon’s fulfillment, consumers may turn to other channels simply because they can’t get their items shipped.
On April 15, a business update from Best Buy stated online sales were up 250% year-over-year, as more customers began to use a mix of delivery and curbside pickup, with each representing about half of total online sales.
In March, the company suspended in-home delivery, installation, and repairs, and switched to curbside service only. Despite this, the CEO said the company had maintained 70% of sales Y/Y.
In an article by Barron’s, an analyst suggested Best Buy is better positioned than most to recover from the pandemic because of its tech focus and growing services business. Also, as more workers in the U.S. are being allowed to work from home indefinitely, there will likely continue to be an uptick in sales for home goods, including electronics, which of course is Best Buy’s specialty.
Just like other online marketplaces, eBay has seen significant growth since the pandemic, pulling in record numbers by eBay standards. eBay GMV is expected to grow between 23% and 26% in Q2, well above it’s 2% average since 2016.
eBay reported a revenue of $2.4 billion in Q1, but is likely to have a net increase of $5 billion since Q2 2019. Since mid-March, eBay reported seeing strength in traffic, acquisition, conversion, sold items, and GMV, in part because of customers’ new-found interest in the platform and Amazon’s focus on essential items. The platform also saw an uptick in small business sellers.
In the U.S., eBay is helping retailers open up shop as quickly as possible, according to one report, and in the U.K. it’s been involved in building a PPE platform. In the meantime, eBay has seen some negative effects as a result of advertising slowing down and removed over 15 million listings because of price gouging or false claims.
eBay has worked to continuously update sellers and consumers about safety precautions and shipping delays. Because eBay relies on individual sellers shipping their own items via FedEx and USPS, it is not experiencing the same supply chain issues as Amazon.
The one issue eBay is dealing with is price gouging, or people taking advantage of concerned consumers. Since February, the marketplace has been working to remove listings and prevent sellers from charging outrageous prices for goods.
When high-demand items ran out on places like Amazon or Walmart, people turned to the individual makers and sellers on Etsy; in the meantime, people who are furloughed or out of work or just looking for ways to fill their time have monetized their skills on Etsy in droves.
The number one item people were looking for? Face masks. Etsy sent a push notification to its sellers encouraging them to make face masks, and at one point, people were searching for face masks on Etsy nine times per second, according to Marketplace Pulse.
There doesn’t seem to be anything negative in the news around Etsy, and in the new normal, the marketplace could continue to fill needs that aren’t met or can’t be met by larger marketplaces.
Google is great at a lot of things, but so far, ecommerce is not one of them. It made headlines in April when it announced retailers and brands could list their products for free on Google Shopping; prior to April, merchants had to pay Google every time someone clicked on their Google Shopping listing.
Relevant items for sale have been attached to searches since 2002, with a service called “Froogle” that was overhauled and turned into Google Shopping in 2012.
According to Marketplace Pulse, Google Shopping has around 4,500 active retailers and brands, but it has yet to address the problems it originally had. For some excellent scathing remarks, read the Marketplace Pulse article we referenced. But otherwise, we wouldn’t call Google Shopping a contender at this time. Read some more of our thoughts on Google Shopping here.
Canadian-based Shopify is a bit of a dark horse. The $83 billion company helps one million companies in over 175 countries build and run online stores, from small brands to Kylie Jenner’s cosmetics line.
During the pandemic, Shopify has introduced a new money management solution specifically for small businesses, made a new cryptocurrency partnership, and launched a consumer shopping app, aptly called Shop. While the money management solution seems pretty great, the app—an updated and rebranded version of Shopify’s original package tracking app—is somewhat clunky in its function, with no clear appeal to consumers looking to shop.
Shopify isn’t exactly a marketplace (it’s more of a platform), so it can’t really be compared to the others on this list—but it’s here because it offers alternative routes for brands, big and small, to sell their products. All in all, the future of Shopify looks bright, even if it has a few kinks to work out.
At just over a year old, Target’s marketplace is the youngest on this list, and one of the smallest with 109 merchants and less than 200,000 products. While Marketplace Pulse suggests Target has not yet applied the things that make it great to its marketplace, its marketplace still saw tremendous usage this first quarter.
According to a business update in April, digital sales trended up 275% from April 2019, with the majority of consumers buying from Essentials and Food, and Apparel and Accessories suffering, on par with other ecommerce trends.
Overall, Target has been a strong performer during the pandemic, the report said, in part because of extended delivery windows on Amazon. Target is hardly a contender for Walmart and Amazon, but it doesn’t really seem like it’s trying to be. There is power in being consistent though, and Target has made it a point to seek out small businesses and help them grow, which could prove to be a boon both to small business owners and to the Target brand.
Read more about Target marketplace trends here.
Last, but certainly not least is the No. 2 contender for the No. 1 marketplace. Like Amazon and eBay, Walmart had a problem with coronavirus-inspired fraud, but it’s also made leaps and bounds with its online grocery and recently launched fulfillment service.
In fact, as recent as this month—Walmart may have pulled into the No. 1 spot, outperforming both Amazon AND eBay. Not only did Walmart.com see a 55% traffic increase in April (compared to just 15% on both eBay and Amazon), but the Walmart app became the No. 1 most downloaded app in the shopping category in mid-May. From January to April 5, the app saw a 460% increase in average daily downloads.
Walmart also added 50% more sellers from April-May, and third-party sellers are reaping rewards from the growth too. It seems the problems that have plagued Amazon with fulfillment have been a non-issue for Walmart, which had the infrastructure in place for WFS in place long before it launched.
We could go on, but long story short: Walmart is killing it.
Like other marketplaces, MercadoLibre saw huge increases in purchases of necessities, such as homecare and laundry products, specifically a 403% increase in March, according to Statista. Sales in “mass-consumption products” and pharmaceuticals also rose by over 100% each.
In response to the pandemic, MercadoLibre announced it would waive fees for sellers of “necessity products.” Reporting on Q1 2020, it seems that MercadoLibre is functioning relatively normally, with on-time deliveries and fully operational storage centers.
Since the outbreak started in China, Chinese marketplaces have been at the forefront when it comes to innovation to meet customer supply and demand.
Like marketplaces around the world, ecommerce in China saw a surge in demand for groceries and other necessities. JD.com and Alibaba both got creative and have continued to innovate to meet consumer demand while supporting sellers—for instance, collaborating with alcohol brands to bring virtual nightlife to people in isolation, and now, offering bookings for COVID-19 tests.
As China slowly relaxes preventative measures, it is likely that consumers who have come to depend on ecommerce for their everyday needs will continue to do so as part of their new normal.
So there you have it. Some marketplaces, namely Amazon, are recovering, while others, like Walmart and Etsy, are thriving. Some are worth watching, like Shopify and Target, while still others have yet to prove their worth, like Google Shopping. International marketplaces like MercadoLibre and Tmall are all responding to the COVID-19 pandemic in different ways in their respective markets.
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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.