July 2020 Ecommerce Trend Analysis for Decision Makers

Newel Cobb

July 1, 2020

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.

Brick and mortar turned upside down

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.

Online grocery is the new gold rush

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 tries to stay ahead

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.”

Ecommerce Trends, Amazon Prime Branding in Search Query

Amazon’s Buy Box predicament

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.”

Logistical delays and impacts for Prime Day, holidays

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.

Ecommerce trends to know for Facebook, TikTok

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.

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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/)