Pattern's Global Ecommerce Predictions for 2021

Misha Pabari

December 15, 2020

Pattern’s senior leadership team have reflected on the past year’s learning to make their global ecommerce predictions for 2021. The rapid acceleration of ecommerce fuelled by COVID-19 has highlighted new standards of excellence for consumer brands and retailers to meet the needs of today’s digital customer.

Below, we outline the trends that brands and retailers can expect to take shape as they finalise their 2021 plans. 

What’s in store for Europe?

Europe’s retail economy has been hit hard, and an over-reliance on bricks-and-mortar stores has become obvious for many consumer brands.

Pattern’s General Manager for Europe Nicola Hollow explains how COVID-19 finally made digital a top priority for many brands, and the impact this will continue to have in 2021.

She says: “The impact of the pandemic has itself become the “Chief Digital Officer” for several businesses in Europe. Brands have been forced to shift their focus to direct-to-consumer and marketplace channels to ensure that sales from stores were not lost; whilst also taking advantage of the rapid growth in online sales in the short-term.”

Europe’s shoppers in more mature markets have bought products online much more than previously, and in the less mature markets it has encouraged shoppers to buy online for the first time. In general, marketplaces, online retailers and omnichannel retailers who have been able to pivot to focus on quickly scaling their online operations have been the winners. I believe a new omnichannel experience will be established over time as the uncertain future of physical retail plays out, and brands seek alternative routes to market.”

Pattern Global Head of Marketing Joanna Perry adds that with Europe facing continued restrictions on its citizens until the COVID-19 vaccine has been widely rolled-out, the bounce back to shopping in store some had predicted for the first half of 2021 is now unlikely to happen.   

The role of D2C

The COVID-19 crisis has enhanced dynamism in the ecommerce landscape globally, and has expanded the scope of ecommerce; with new businesses, consumer segments and product categories. More shoppers are buying everyday necessities online, and so a direct-to-consumer (D2C) online channel is one we would recommend every brand investigates. 

Director of Consulting for Europe Kerry Lee explains how a D2C website can pay dividends for brands who understand how to maximise their value as a channel to market. She says: “Investment in D2C channels for brands and retailers will continue in 2021. There is a nervousness about the power wielded by marketplaces; many brands see a benefit in strengthening their D2C proposition, which can deliver higher margins and provide insightful customer data. A re-evaluation of channel strategy will see many brands adapt their marketplace assortment and pricing to ensure that they can fully optimise their overall D2C activity to reflect how customers will shop now, but also in the near future.”

“In addition to this, brands and retailers will need to work hard to meet increasingly high growth targets, therefore getting the basics right will continue to be key. Since COVID-19 hit, consumers have been more forgiving of longer delivery times and less responsive customer service but, as the impact of the pandemic wanes, the need to meet high customer expectations will return. Meanwhile, investing in recreating offline shopping experiences online will continue to be a focus not only in the short-term, but also as part of every brand’s long-term digital strategy.”

Global marketplace dominance: Amazon, Tmall and Walmart

Online marketplaces have picked up demand that offline channels could not service in every region that we operate in 2020. In 2021, they will be seeking to continue their growth by adding new customers, as well as selling more to those they already have signed up. Improved product selection and improved customer experience are both crucial to this strategy, and underpin several of the global ecommerce predictions made by the team.

Pattern’s Chief International Officer Chris Vincent shares his global ecommerce predictions on what to expect from Amazon in 2021: “The net effect of the pandemic showed that traditional shopping habits have changed. The longer this goes on, the more permanent the new behaviour will become with all online businesses benefitting from it - marketplaces most of all. Amazon is expanding rapidly onshore into new markets across Europe, South America and South East Asia. The failings of traditional retail businesses plays to Amazon’s strengths and I can only see its offer get stronger in the New Year.”

“It is clear that Amazon is targeting South East Asia as its next big push, thanks to its growing middle class and very large population. Having learned some valuable lessons about localisation in harder-selling markets like the Middle East and India, I believe Amazon will thrive in this region by using Singapore as its hub. Their willingness to fail fast in order to learn and grow makes me think Amazon will be successful in the region in the long-term.”

Alibaba will be Amazon's key competitor in the region, and so we expect it to leverage its existing relationships with brands selling on its China marketplace Tmall, to encourage them to also list on Lazada; Alibaba's marketplace which operates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Pattern's General Manager for Asia Arthur Cheung predicts that online sales in China will continue to grow overall in 2021, with continued demand for luxury and premium Western brands. The major players Tmall, JD.com and Pinduoduo all continue to innovate their customer experience at a fast rate, and so marketplaces will maintain their dominant position in China.

Much like China, marketplaces make up a majority share of total online sales in the USA, and customer experience is where there competition is at there too.

Our Director of Marketplaces George Hatch, shares his US ecommerce predictions for 2021: “Brick-and-mortar businesses will continue to struggle in the first half of the year as they contend with how to make consumers comfortable returning to shop in person with mask mandates, limiting the number of shoppers in person and increased sanitation and cleaning protocols. I suspect US ecommerce sales will continue to grow in 2021, though at a much slower growth rate when compared to previous years.”

“US online marketplaces including Amazon, Walmart and Target+ will continue their expansion in 2021 with Amazon setting the pace. I believe Walmart and Target+ both have opportunities to grow their market share and expand on the triple digit growth they enjoyed in 2020, via programmes such as Walmart + and Target’s Drive Up, Shipt and same day Order Pickup offerings – in their bid to compete with Amazon’s plethora of services.”

Global Ecommerce Predictions: A new online sales growth trajectory

For the Australian ecommerce market, 2020 saw a rise in online adoption greater than most anticipated. A report by Australia Post identified that its forecast of 12% of consumer spending online by 2021 was hit by March this year, with the pandemic altering the trajectory of the ecommerce industry.

Pattern’s Head of Customer Marketing for ANZ Kathryn Coleman draws on the results from our Australian Ecommerce Benchmark reports to make her predictions for 2021 ecommerce growth trends: “Having monitored a subset of Australian retail websites, we reported a 76% increase in ecommerce revenue vs. last year, driven by 29% more online traffic and a 37% increase in conversion. Melbourne’s 112-day lockdown also drove historic online adoption with Victorian conversion on average 73% higher than the rest of Australia between July and October 2020. Key trading dates such as Amazon Australia’s Prime Day and Cyber Weekend did not disappoint, with a number of our clients enjoying a record sales performance when compared to previous years.”

“Based on these results, I believe 2021 is likely to set new highs, records and benchmarks that did not seem possible until the pandemic forced customers to turn to online. Looking beyond the impact of the pandemic, I expect this shift to online spending to stick throughout the next year. With that in mind, brands must recalibrate and prepare for the possibility of future lockdowns, putting higher pressure on their ecommerce department, logistics and fulfilment.”

Similarly in the Middle East, this past year has seen huge growth and focus applied to ecommerce, with many retailers who may have previously been reluctant to embrace digital change, now broadening their horizons.

Pattern’s General Manager for MENA David Quaife tells us how the shift from offline to online has meant there is no longer a choice to be made between physical and digital retail.

“COVID-19 has done what most didn’t think possible in this region and moved customers away from shopping in malls and got them comfortable shopping online. This trend shows no signs of slowing down and the region’s two largest ecommerce players, Amazon and Noon will be making sure they capitalise on this. For consumer brands, it is more important than ever to ensure their digital distribution strategy is clear moving into 2021 as pricing becomes more visible and competition stronger on these highly viewed marketplaces.”

“Furthermore, 2021 will continue to see Amazon and Noon expand out from their current countries of operation and scale their businesses into the wider GCC and North Africa. We’ve already seen this happen this year when Amazon launched cross-border orders from its UAE site into Kuwait, Oman and Bahrain, effectively doubling its potential customer base. I expect to see more logistics solutions like this in place soon as Amazon plans to launch in Egypt, following in the footsteps of Noon who has already seen success in the market.”

Private equity to continue investing in digital

Pattern Director Jeremy Wilson who leads our Private Equity Practice outlines his global ecommerce predictions for what to expect from private equity in 2021.

He says: “Online brands who have performed well this year, will be looking to “lock-in” a good valuation on their businesses. We are already seeing this trend emerge with the due diligence work that we’re currently carrying out.”

“Aside from being particularly interested in those brands with strong online propositions, and that have shown resilience during lockdown, private equity investors will go further up the chain and invest in the infrastructure supporting the operations. This has already been the case with major investments going into distribution centres and operations around the UK. I see this expanding into 3PL operating companies, carriers, and support technology."

He adds: "Technology is likely to be the most interesting area to follow. I would expect to see investments going into technologies that make it easier for consumer brands to manage and trade on multiple channels, whether owned or via 3rd party.”

For brands and retailers who may have previously viewed digital commerce as a secondary channel, having an online presence has never been more important. For those looking to prepare themselves for the 'new normal', having the right capabilities to adapt and strengthen your existing offerings and drive channel shifts is essential.

If you would like support on how to reassess your ecommerce strategy - or with optimising specific online channels such as your D2C site or marketplaces - please get in touch here.

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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 22, 2022

How an Amazon SEO Agency Should Be Serving Your Brand

If you’re in the global ecommerce space, you are most likely aware of Amazon, and probably selling your products on the marketplace. With over $470 billion in sales in 2021 alone, Amazon stands as the third largest company in the world based on revenue. The ecommerce giant is a household name in the U.S. and working hard to grow its market share across five continents worldwide.

Having your products available on Amazon and being competitive there, though, are definitely two different things. If you want to really succeed on Amazon, you’ll need specialized insight into how Amazon works and how to make it work for you. So, for many brands, it’s a great idea to work with an Amazon Search Engine Optimization (SEO) agency.

At Pattern, Amazon SEO optimization service is one of our key competencies. We understand that technology, data-driven insights and expertise  are the most important tools brands can leverage to win top listing spots on digital marketplaces. With expert teams and years of experience, we help brands conquer the Profitability Death Spiral as they compete with other products and sellers online. We offer Amazon SEO agency services as a core solution to brands that need more resources to get ahead. 

What is an Amazon SEO Agency?

An Amazon SEO agency serves brands by improving their products’ rank and listing performance on Amazon. They make strategic decisions about ad spending and placement that lead to higher traffic, conversions, and revenue for ecommerce brands.

A great Amazon SEO Agency partner will:

Prioritize Your Success

Unfortunately, many Amazon SEO agencies profit in unfair ways from your brands’ perceived success based on the ROAS numbers they provide. This is done through including branded search terms in ROAS reports, which naturally skew listing performance

Let’s say, for instance, your brand is called “Annie’s” and you sell lollipops. Your brand has a very high likelihood of winning the top listing spots on Amazon for lollipop search terms that are paired with “Annie’s,” your brand name. So, SEO agencies will spend your ad money on those terms and report a very high ROAS. 

To avoid scenarios like these, it’s best to look for an agency that either calculates their profits on metrics other than your ROAS scores or weighs branded search terms differently in the performance metrics reports. Regardless of your Amazon SEO agency’s cost structure, you should align onbranded search terms before committing to a scope of work.

Provide Detailed Competitive Insight

A great indicator of a high-quality Amazon SEO agency is the level of insight they can provide into your competitors’ listing positioning and how it compares to yours. Data fanaticism is so important at Pattern that we’ve developed proprietary technology to display this exact information with precise detail for every brand we work with. In fact, you can find our free version here to see how you compare to some of your top competitors based on ASIN.

It’s certainly possible to improve your Amazon search performance with blind spending strategies. But a truly great solution will help you to know where your dollars are at their most powerful and competitive.

Reduce Your Ad Spend Over Time

Amazon’s A10 algorithm prioritizes customer satisfaction—it wants to show consumers the best products that align with their search intent to improve conversions and sales. So, the best way to gain momentum on Amazon is to work on incremental wins. 

Improving your performance on more obscure search terms that align with your customers’ search intent is a great way to increase ROAS for the long term. A10 will reward your success with better rankings on higher-volume search terms and the virtuous cycle can help you conquer your most-coveted listing spots. And the best part? This process of gaining momentum, if done right, will naturally decrease your ad spend over time as Amazon recognizes your value and works with you to keep your products at the top of consumers’ search results.

Amazon SEO Optimization and More

As an Amazon SEO specialist, Pattern knows how to help your brand win better success for long-term profitability on Amazon. With our data-driven tools and brilliant teams of ecommerce experts, we help brands with listing management, content optimization, Amazon ad strategies, and more.

Contact us to learn more about our SEO optimization services.

Sept 20, 2022

Global Ecommerce Weekly News: 20th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to raise pay and add extra work benefits for delivery drivers Following the rise in fuel prices and protests by Amazon workers, the ecommerce giant is raising its delivery drivers’ pay and adding more work benefits. Amazon has mentioned that it will be investing $450 million into rate increases along with an education program and a Delivery Service Partners program. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/amazon-to-raise-delivery-drivers-pay-and-add-more-work-benefits/) Amazon announces it will give away shipping software to merchants at no cost Amazon has recently announced that it will be giving ecommerce merchants free software to manage shopper orders on and off its platform as it extends its reach. The ecommerce giant will be ending monthly costs for sellers using Veeqo, a shipping software it recently acquired and instead offer to them a new, free shipping software. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/amazon-to-give-away-shipping-software-to-merchants/) --- Other Marketplace News --- Walmart unveils new virtual fitting rooms In an effort to drive clothing sales, Walmart has launched virtual fitting rooms while competitors reduce spending amid the cost of living crisis. The virtual try-on tool can be used by Walmart customers to virtually measure the clothing items and see how the products would look on them. Shoppers will now be able to see how over 270,000 clothing items on Walmart’s ecommerce site would look on their bodies. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/walmart-launches-virtual-fitting-rooms-to-drive-clothing-sales/?utmsource=Retail+Gazette+Subscribers&utmcampaign=2da7f0f8f8-EMAILCAMPAIGN202209150742&utmmedium=email&utmterm=0d23e2768b6-2da7f0f8f8-61040615) THG slashes sales and profit expectations The Hut Group has slashed its forecasts for 2022 as rising interest rates, inflation and energy costs take a toll on consumers. Previously, THG estimated its sales growth to be between 22-25% but after a recent evaluation, has lowered this prediction to between 10-15%. Initial predictions did not take into account the negative effects of ceasing sales in Russia and Ukraine along with the impact that the cost-of-living has had on consumer spending. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/thg-slashes-forecast-as-cost-of-living-crisis-hits-consumers-wallets/) --- Other Ecommerce News --- DHL and Post Office team up to provide click and collect services Through a partnership between delivery company, DHL and Post Office, a new click and collect service is to be tested at Post Offices before rolling out to over 1000 branches across the UK. Online shoppers will now have the option of choosing their local Post Office as a collection point, and DHL will fulfil the delivery aspect, opening up networks for both parties. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/post-office-partners-with-dhl-express-to-provide-click-and-collect-services/) US consumer watchdog plans to further regulate the BNPL sector The US Consumer Financial Protection Bureau (CFPB) has raised concerns regarding the collection of consumer data and the fast-growing nature of the BNPL sector, which includes companies such as Affirm and Klarna. The CFPB is worried that these companies could be negatively impacting consumers’ financial health and aims to put better regulations in place to ensure consumers are safe and empowered. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/us-consumer-watchdog-to-start-regulating-bnpl-sector/) Japanese ecommerce market estimated to grow by 6.9% in 2022 The ecommerce market in Japan, largely dominated by domestic online retailers including Reakuten and Mercari, is set to reach $194.3 billion USD in 2022, after seeing an annual compound growth rate of 5.2% between 2018 and 2021. This makes Japan the fourth leading ecommerce market globally, following China, the US, and the UK. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/13/japan-ecommerce-market-to-grow-by-6-9-in-2022/) Ecommerce brands are spending more on TikTok ads TikTok may soon be surpassing Facebook and Google as the most lucrative advertising channel, with ecommerce brands spending 60% more on TikTok ads in Q2. Facebook is still ahead as the top choice for ecommerce advertisers but only grew by 5.6% from Q1, while Google grew 20.5% in Q2, and Snap declined 10.8% in Q2. [Read more on SearchEngineLand](https://searchengineland.com/ecommerce-brands-spent-60-more-on-tiktok-ads-in-q2-387876)