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.

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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 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)