Ecommerce Trends for 2021

John LeBaron

March 8, 2021

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.

Ecommerce growth trends

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?

1. Use online marketplaces

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.

2. Create a convenient customer experience

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.

3. Pay attention to categories

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.

4. Expand to an omnichannel strategy—don’t forget social media

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.

Ecommerce trends for 2021

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.

Contact Pattern to talk about your ecommerce needs or request a demo of services today.

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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)
Sept 13, 2022

Global Ecommerce Weekly News: 13th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon scales back on US warehouse facilities Amazon is shutting down two facilities with 300 employees, discarding plans for 42 facilities, and delaying plans to open a further 21 buildings across the US. The ecommerce giant is scaling back on hiring as well as the expansion of its vast delivery network, as it was left with an excess of space following its rapid expansion during the pandemic. [Read more on Business Insider](https://www.businessinsider.com/amazon-closes-2-facilities-scraps-plans-42-new-buildings-report-2022-9?r=US&IR=T) --- Other Marketplace News --- JD.com is ‘betting’ on ecommerce grocery market Amidst a slowing economy and a decline in ecommerce, Chinese ecommerce giant JD.com has increased its urgency to seek new growth engines. The company is looking to boost its online grocery business through offline partnerships and expansion into lower-tier cities, where it may be able to unleash more consumption power. [Read more on The Star](https://www.thestar.com.my/tech/tech-news/2022/09/08/chinese-ecommerce-giant-jdcom-bets-big-on-online-grocery-lower-tier-markets-amid-slowing-economy) Shopee shuts operations in Argentina, Chile, Colombia, and Mexico Sea’s ecommerce arm, Shopee, has shut local operations in some LATAM countries but will continue to maintain cross-border operations in a few markets. Latin America is Sea’s most important region following South-east Asia, accounting for close to 19% of its revenue in 2021. The move away from these countries is largely due to increased levels of macro uncertainty and rising interest and inflation rates, and rather putting a focus on its core operations. [Read more on Straits Times](https://www.straitstimes.com/business/companies-markets/seas-shopee-shuts-operations-in-argentina-chile-colombia-mexico-sources) --- Other Ecommerce News --- Instagram scales back in-stream shopping elements Instagram is re-examining its approach as it hasn’t been able to make ‘fetch’ happen. ‘Fetch’ in this context being the online shopping trends which have become all-consuming in China, and what Western social platforms have been hoping to add into their apps to make them more addictive and revenue-generating. Consumers have not been swayed by the latest shopping tools on TikTok and Instagram, leading to Instagram scaling back its in-stream shopping program. [Read more on SocialMediaToday](https://www.socialmediatoday.com/news/instagram-scales-back-in-stream-shopping-elements-as-it-re-examines-its-app/631276/) FedEx Express supporting the growth of cross border ecommerce FedEx express has expanded its international commerce shipping service to four more markets across the Asia Pacific, Middle East and Africa (AMEA) region in an effort to support the strong development of ecommerce in this region. Three of the fastest growing markets, the Philippines, Indonesia and Vietnam are leading Southeast Asia’s ecommerce sales, which is set to reach $100 billion by 2023. [Read more on Post & Parcel](https://postandparcel.info/149889/news/e-commerce/fedex-express-supports-the-growth-of-cross-border-e-commerce-within-the-amea-region/) India ramps up hiring as companies prepare for shoppers Ecommerce companies are getting ready for the festive season by rapidly expanding their temporary workforce. As ecommerce in India grows, the country is predicted to have 372 million online shoppers by the end of 2022. The festive season this year, running from October to December, is expected to see a two-fold increase in logistics and delivery alone. During this period, companies are predicted to add 20% more to their existing workforce base, with a 8-10% higher pay scale compared to last year. [Read more on Business Insider India](https://www.businessinsider.in/business/ecommerce/news/the-great-indian-festival-of-hiring-e-commerce-companies-gear-up-for-indias-shoppers/articleshow/94000346.cms)
Sept 6, 2022

Global Ecommerce Weekly News: 6th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon announces new inventory and distribution service, AWD Amazon has launched Amazon Warehousing and Distribution (AWD), providing inventory and distribution services to its sellers as a means of addressing current supply chain issues. AWD is now available for sellers using Fulfilment by Amazon (FBA), i.e. outsourcing their fulfilment to the platform. Amazon has plans to expand the service outside the platform in 2023. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/02/amazon-introduces-new-service-to-help-solve-supply-chain-challenges/) Amazon Web Services (AWS) launches in the UAE AWS, Amazon’s cloud-computing platform offering, has launched its second region in the Middle East and now provides its services in the UAE. The move will now allow anyone in the UAE who utilises cloud technologies to harness AWS’s advanced platforms and APIs. An estimated $11 billion USD is expected to be added to the UAE’s GDP thanks to the implementation, with an average of 6,000 external vendor jobs to be created annually. AWS is now available in 87 zones across 27 regions, with sights set on expanding further across Australia, Canada, India, Israel, New Zealand, Spain, and Switzerland. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/30/amazon-web-services-launches-region-in-uae/) --- Other Marketplace News --- Lazada to launch in Europe Alibaba-owned ecommerce platform Lazada is set to launch in Europe, marking a refreshed internationalisation push from the company. The move follows toughening economic conditions and performance in Southeast Asia, advancing the need to tap overseas markets. In Europe, Lazada will face tough competition from giants like Amazon and Zalando. Lazada’s exact entry strategy is to be confirmed and will be reliant on macroeconomic and market conditions, according to Lazada CEO James Dong. [Read more on DigitalCommerce360](https://www.digitalcommerce360.com/2022/09/01/alibabas-lazada-to-take-on-amazon-zalando-in-europe-push/) Chinese ecommerce giant Pinduoduo to launch cross-border platform in the United States Pinduoduo, a Chinese ecommerce giant rivalling Alibaba and JD, has announced it will be launching a new cross-border ecommerce platform. The marketplace is set to launch in the United States next month, as part of the company’s larger push into new markets. Pinduoduo found success in China thanks to its rock-bottom price offerings and harnessing of social commerce marketing, emulating strategies similar to fast-fashion giant Shein. [Read more on Yahoo Finance](https://uk.finance.yahoo.com/news/pinduoduo-launch-international-e-commerce-034129263.html) Alibaba launches its biggest B2B sales event, ‘Super September’ China ecommerce giant, Alibaba, has now launched its month-long B2B sales event ‘Super September’. The event provides 40 million buyers and 200,000 suppliers with the ability to connect on the platform, showcasing a ‘virtually unlimited’ number of products. The event hopes to foster new cross-border business relationships to tackle supply chain challenges currently faced by businesses. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/alibaba-launches-super-september-b2b-sales-event/) --- Other Ecommerce News --- Klarna’s losses quadruple in first half of 2022 BNPL provider, Klarna, has reported losses of $581 million USD for the first half of 2022. This figure is almost four times larger than a year earlier, where $129 million USD in losses were reported. The company attributes the losses to employee costs, technology investments, and rising credit losses. Klarna’s figure reporting comes amidst worsening economic conditions, fresh legal and regulatory scrutiny, and pressure from Big Tech competitors. [Read more on The Financial Times](https://www.ft.com/content/483451db-9221-4ca4-83a6-b4ddc6bfcfbb) [Read more on the Guardian](https://www.theguardian.com/business/2022/aug/31/klarna-losses-more-than-triple-as-consumer-spending-slows) One fifth of Snap employees to be laid off amidst poor financial performance Social media platform Snap (‘Snapchat’) has announced it will be laying off 20% of its employees and closing out a number of projects following a year of poor financial results.The move will see 1,200 employees globally lose their jobs, saving the company an estimated $500 million USD in costs. Snap is currently valued at $20 billion, an 84% decrease from its valuation of $130 billion last year. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/snap-to-lay-off-20-of-its-workforce-and-wind-down-a-number-of-projects/)