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, 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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Aug 4, 2022

How Disjointed Sellers Take Away Brand Control on Ecommerce Marketplaces

A top issue we see with brands struggling on ecommerce marketplaces is a loss of brand control due to disjointed sellers—those that aren't following your brand policies and guidelines when selling your products online. Disjointed sellers can be gray market, unauthorized, and rogue sellers, as well as 3P and other sellers that are noncompliant with your branding, pricing, and other forms of representation online.

It can be very easy for brands to lose control of their ecommerce strategy when they can’t get a handle on disjointed sellers. Typically, these brands are either stuck in a game of whack-a-mole or just ignoring the warning signs of bigger issues and hoping for the best. But, when disjointed selling isn't handled right, the consequences can be devastating to profitability. A loss of brand control doesn’t happen overnight, and the factors that contribute to it are long-standing. 

Erode Consumer Trust

Before the advent of ecommerce, brands favored a wide distribution. It was the easiest way to get products to as many distributors as possible. But wide distribution, when left unchecked, leads to leaky distribution—allowing your excess products to end up in the hands of unwanted sellers.

So brands that continue to operate with a wide distribution strategy are losing brand control and are damaging their brand equity and product performance. Why? You’re unable to monitor your products’ pricing, performance, or quality. You can’t dictate how you’re represented by each seller, creating an inconsistent and false representation of your brand to your new and existing consumers. These issues often lead to poor reviews and erode opportunities to build trust with future customers.

Wear Away Brand Equity

In today’s ecommerce landscape, marketplaces and digital platforms connect people and sellers to make online shopping simple and seamless. They also provide customers complete price transparency. Google, for instance, allows consumers to access any of your products on virtually every ecommerce channel and retail location and posts them side-by-side for you to comparison shop.

Now, everyone from your D2C distributors to large marketplace sellers, legitimate 3P sellers, and rogue and unauthorized sellers are on a level playing field—they’re all presented to the searching consumer, and that consumer has the purchase power.

Disjointed sellers have just as much power and authority to represent your brand as you do, without the same quality, pricing strategy, and customer focus as you.

Cause Competition and Price Matching Issues 

In most shopping scenarios, consumers will choose to purchase a product from whichever seller offers the lowest price. Marketplaces like Amazon and Walmart know this, and optimize their product selection based on all retail offers to serve consumers the lowest price for the same item.

This means that as one seller drops the price of your product, the next will follow, and then the next, etc. Everyone gains access to the product at or below MSRP. This opens the door for unauthorized sellers to purchase inventory during promotions or at discounted prices and then turn around and sell the same product slightly below competing sellers’ prices—for profit.  

As customers search for your product, they notice the cheaper price and purchase from the unauthorized seller, rather than paying the price you’ve established with your retail teams. Simultaneously, as Amazon monitors their product listing against other available channels, they notice they don’t have the lowest price. So Amazon, and other marketplaces, in service of the consumer, drop their price to match the lower price offered by an unauthorized seller. To stay competitive, your other channels follow suit. The cycle, also know as the profitability death spiral, continues to drive down the price of your product, grinding away your margins and profitability.

This doesn’t sound like much of a problem if your brand isn’t actively selling on ecommerce marketplaces, right? Unfortunately, it causes big issues for your brick-and-mortar sales, too. Large retail chains like Best Buy and Macy’s noticed this potential loss of sales from ecommerce and needed to defend and protect their profit. Retailers started telling brands that, in order to keep their products in-store (which accounts for 80% of most brands’ sales) they would need to lower their prices to match online prices. Which led to the concept of price matching. If a customer could prove the price of a product was lower somewhere else, Best Buy would match the lower price and charge the brand for the difference.

As other brick-and-mortar retailers jumped on the trend, brands started to see large losses in their margins.

Gain Ecommerce Control with Pattern

The danger that disjointed sellers pose to brands is enormous—without a way to control all of a brand’s distribution points on ecommerce, your brand spins farther and farther down the profitability death spiral. Using custom technology and data-driven insights, Pattern can identify disjointed and unauthorized sellers for your brand and develop a custom strategy tailored to your specific needs to address these big issues as soon as possible. Then, Pattern partners with the econtrol law firm, VORYs, to enforce take downs and save brands who find themselves caught on any stage of the death spiral.

With the right resources and expert help, we’ve helped hundreds of brands to regain their footing and control on ecommerce, win the buy box, and grow their sales. 

Contact us today to regain your brand control.

Aug 2, 2022

Global Ecommerce Weekly News: 2nd August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon sees its share price rise 10% and beats revenue expectations Amazon has exceeded revenue expectations, mainly due to its Amazon Web Services cloud business and its fast-growing advertising arm. Investors who have been concerned about the effects of sharp macroeconomic effects have been reassured as the ecommerce giant has overperformed and seen growth. [Read more on the Financial Times]( Amazon set to launch localised versions of its Prime Video in Southeast Asia Amazon is launching local versions of Prime Video across three countries in Southeast Asia, with new investments in local content. The service will launch in Indonesia, Thailand and the Philippines, where users will be offered a 7 day free trial along with other discounted introductory offers. Prior to this launch, consumers in these countries had been able to shop cross-border on the platform but Prime Video has not been available until now. [Read more on Charged Retail]( Amazon closes down its cloud storage platform, Amazon Drive By the end of 2023 Amazon Prime members will be losing a big feature, Amazon Drive, as the company turns its attention towards its Amazon Photos service. The tech giant wants to focus on photo and video storage features, allowing Prime members to safely back up, share and organise photos & videos with Amazon Photos, which is currently available on iOS, Android and desktop devices. [Read more on Charged Retail]( --- Other Marketplace News --- Shopify lays of 10% of its workforce Shopify has cut 10% of its workforce as it struggles with a slowdown in ecommerce growth. The company was relying on a permanent jump in online purchases in the retail space, and are now realising that incorrect assumptions were made, which now need adjustment accordingly. [Read more on Charged Retail]( Alibaba Group goes after primary listing on the Hong Kong Stock Exchange By the end of 2022, Alibaba will become dual-primary, listed on both the NYSE (New York Stock Exchange) and HKSE (Hong Kong Stock Exchange). Being listed in two major financial centres will allow the company to expand its openness and diversity, broaden its investor base, and will help to pave the way for its globalisation strategy. [Read more on Charged Retail]( Shopee and P&G launch virtual home shopping experience As part of Procter & Gamble’s Regional Super Brand Day on Shopee, a new exclusive 360 degree virtual home shopping experience feature has been launched, with P&G brands of household essentials on offer, categorised according to rooms. Accessible through P&G’s official store on Shopee’s website and app, the feature includes multi-format touch points like videos, games, and localised content to make online home shopping convenient and engaging. [Read more on Business Mirror]( The Hut Group ends investment deal with Japan’s Softbank UK ecommerce company, THG, has recently put an end to an investment agreement with Softbank due to “global macroeconomic conditions”. The deal was made to help fund the expansion of THG’s technology platform before going public in London. The company saw its share price fall after the announcement and its valuation remains well below its flotation price despite recent bidding wars. [Read more on The Guardian]( --- Other Ecommerce News --- Third-party online marketplaces sales to account for 59% of all global ecommerce by 2027 By 2027, third-party sales through marketplaces will be the largest and fastest-growing retail channel globally, accounting for two thirds of all online sales. Alibaba will continue to hold its place as the global leader in retail sales, growing total net GMV sales in 2027 to $1.5trn, and Amazon in second place with $1.2trn. The number of third-party marketplaces operating globally has increased by over 500% since 2007, and is expected to see further growth. [Read more on Internet Retailing](
Aug 2, 2022

How Poor Product Listings Damage Your Brand on Amazon

Since most brands only sell about 20% of their products online, it’s common for executives to turn a blind eye to their poor ecommerce performance—issues there are probably a small problem, right? But if you can pinpoint the lackluster ecommerce profitability to poorly-performing listings, then you can take care of issues now that would snowball to greater losses as your brand grows.

As an expert in ecommerce and the world’s foremost ecommerce accelerator, Pattern has unparalleled expertise in managing brands across global marketplaces. Partnering with Pattern gives you access to data, technology, and top teams across multiple disciplines that help you prioritize great product listings in your overall ecommerce strategy and provides the resources to improve underperforming listings. 

We've highlighted three ways poor listings impact your Amazon marketplace performance.

Negatively Impacts Your Discoverability

If your listings aren’t optimized for SEO and strategic ad placement, they will not be found by customers. And if your products aren’t found, your traffic, conversions, and overall profitability drop significantly. Pattern’s Amazon data and trends suggest that only the top four products listed in an Amazon search result drive more engagement with a brand's listing. So, optimizing your products for organic discoverability needs to be a priority for your ecommerce efforts.

Typically brands find it tempting to underestimate the power of SEO and paid ads, but the stakes are too high to ignore their impact for long. To put it into perspective, Amazon’s ads are clicked 42% more often than Google ads. And, the data shows when people search for products, 74% of them search Amazon first. 

Another reason Amazon search is so valuable is because of where your consumers are in their buying journey. Ads on social media and Google can be valuable, but on Amazon, you have the advantage of knowing your audience’s search intent. Appearing in front of consumers wanting and ready to buy a product that aligns with their search query is a huge opportunity that you can’t miss.

So, you need to be putting the right resources into creating and testing your listing titles, product descriptions, search filters, and backend search terms. (We’ve listed some of the best practices for brands here.) As you find what works, Amazon’s algorithm will be able to better identify your products and serve them in front of consumers ready to buy.

Pattern’s expert SEO teams know the best practices and how to optimize your product listings for the right audiences to improve your rankings for better traffic and conversion wherever you sell your products online.

Misrepresents Your Brand

It’s hard to overestimate the importance of brand affinity on ecommerce marketplaces. One of the key reasons you should be establishing a strong brand presence is to build a consumer base of loyal, repeat customers. 

Repeat purchases from repeat customers are a true sign of a healthy, thriving brand. And when you can establish a great relationship and deep trust with the people you’re selling to, you’ll naturally build positive momentum with their reviews and word of mouth endorsements. In short, it’s easier to reduce buying friction, the cost of conversion, and the cost of acquisition with people who already have an enthusiastic opinion of your products, leading to more conversions and overall success for your brand.

Clearly, it’s valuable to find your brand advocates, but how do your listings help you do that? The first is by claiming the buy box

Many brands struggle with disjointed sellers—3P sellers who have acquired your products, (for example—after buying them on deep discount) and now “pose” as your brand to sell those products to consumers. They often sell your products below their MAP price in order to claim the buy box, attracting more traffic and conversions.

As those customers are drawn to those listings instead of yours, they experience a disconnect in what they normally associate with your brand—often, the copy, media, and even the grammar are ignored for profitability for unauthorized sellers. They often focus on keyword stuffing and quick turnaround to capture traffic and end up poorly representing your brand.

Issues like losing the buy box can hurt your brand long-term, especially if 3P sellers are selling returned, damaged, or fake products in your name. When you have a true understanding of how to optimize your product listings to outperform your competition, you can win the buy box and reclaim your brand presence for your repeat and future customers to ensure better long-term success.

Pattern knows the dangers of disjointed sellers leading to poor brand representation. We have both legal partnerships and listing optimization strategies at our disposal that are proven to help you get ahead of disingenuous sellers and reclaim your brand’s presence wherever you sell online.

Lowers Your Conversion Rates

In order to achieve long-term profitability and growth on ecommerce marketplaces, it’s important to keep your conversion rates as high as possible. Pattern’s experts have found that a low conversion rate signals to Amazon your products aren’t worth showing to customers, significantly lowering your sales potential. But a great conversion rate helps improve your organic rankings and raises your ROI for paid ads—making it easier and less expensive to sell your products in the long run.

So, how do listings affect your conversion rates? Consumers searching for products on Amazon are more likely to purchase from a brand they trust. And without being able to physically sample your product, they have a short window with limited information to decide whether or not they’ll purchase from you. 

We know from extensive data analysis and research there are a few key components of your listing that help in building trust with your consumers. One of those components is the quality of your images.

If your images are blurry or you only post 1 or 2, customers will have a hard time understanding what your product is and its potential value to them. So, they’ll keep searching instead of purchasing your product. Things like the images’ lighting, background, the quality of your equipment, and your editing process shouldn’t be left up to chance. 

Partnering with an ecommerce product photography expert is a way to make sure you get the best photography for your products, and your images are optimized for both your brand and your marketplace.

Pattern Boosts Your Product Listing Performance 

When it comes to optimizing your ecommerce strategy, Pattern has all of the resources you need to achieve long-term profitability. Not only do we have the data and technology to analyze a brand's current performance and opportunity on marketplaces, Pattern has all of the necessary teams to optimize your success from end to end. As the world’s top ecommerce accelerator, Pattern knows the key drivers for boosting listings, conversions, and profitability for brands.

Ready to improve your product listings? Contact us.