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.
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.
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.
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.
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 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.
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.
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).
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.
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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If you’re in the global ecommerce space, you are most likely aware of Amazon, and probably selling your products on the marketplace. With over $470 billion in sales in 2021 alone, Amazon stands as the third largest company in the world based on revenue. The ecommerce giant is a household name in the U.S. and working hard to grow its market share across five continents worldwide.
Having your products available on Amazon and being competitive there, though, are definitely two different things. If you want to really succeed on Amazon, you’ll need specialized insight into how Amazon works and how to make it work for you. So, for many brands, it’s a great idea to work with an Amazon Search Engine Optimization (SEO) agency.
At Pattern, Amazon SEO optimization service is one of our key competencies. We understand that technology, data-driven insights and expertise are the most important tools brands can leverage to win top listing spots on digital marketplaces. With expert teams and years of experience, we help brands conquer the Profitability Death Spiral as they compete with other products and sellers online. We offer Amazon SEO agency services as a core solution to brands that need more resources to get ahead.
An Amazon SEO agency serves brands by improving their products’ rank and listing performance on Amazon. They make strategic decisions about ad spending and placement that lead to higher traffic, conversions, and revenue for ecommerce brands.
A great Amazon SEO Agency partner will:
Unfortunately, many Amazon SEO agencies profit in unfair ways from your brands’ perceived success based on the ROAS numbers they provide. This is done through including branded search terms in ROAS reports, which naturally skew listing performance.
Let’s say, for instance, your brand is called “Annie’s” and you sell lollipops. Your brand has a very high likelihood of winning the top listing spots on Amazon for lollipop search terms that are paired with “Annie’s,” your brand name. So, SEO agencies will spend your ad money on those terms and report a very high ROAS.
To avoid scenarios like these, it’s best to look for an agency that either calculates their profits on metrics other than your ROAS scores or weighs branded search terms differently in the performance metrics reports. Regardless of your Amazon SEO agency’s cost structure, you should align onbranded search terms before committing to a scope of work.
A great indicator of a high-quality Amazon SEO agency is the level of insight they can provide into your competitors’ listing positioning and how it compares to yours. Data fanaticism is so important at Pattern that we’ve developed proprietary technology to display this exact information with precise detail for every brand we work with. In fact, you can find our free version here to see how you compare to some of your top competitors based on ASIN.
It’s certainly possible to improve your Amazon search performance with blind spending strategies. But a truly great solution will help you to know where your dollars are at their most powerful and competitive.
Amazon’s A10 algorithm prioritizes customer satisfaction—it wants to show consumers the best products that align with their search intent to improve conversions and sales. So, the best way to gain momentum on Amazon is to work on incremental wins.
Improving your performance on more obscure search terms that align with your customers’ search intent is a great way to increase ROAS for the long term. A10 will reward your success with better rankings on higher-volume search terms and the virtuous cycle can help you conquer your most-coveted listing spots. And the best part? This process of gaining momentum, if done right, will naturally decrease your ad spend over time as Amazon recognizes your value and works with you to keep your products at the top of consumers’ search results.
As an Amazon SEO specialist, Pattern knows how to help your brand win better success for long-term profitability on Amazon. With our data-driven tools and brilliant teams of ecommerce experts, we help brands with listing management, content optimization, Amazon ad strategies, and more.
Contact us to learn more about our SEO optimization services.
Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces.
Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.
So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.
Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products.
An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.
An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.
Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.
At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services.
It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.
It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.
The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.
Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces.
With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.
Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.