Stats roundup: the impact of Covid-19 on ecommerce

From consumer behaviour to demand prediction to retention, the events since March 2020 have altered or sped up almost every facet of online retail.

We’ve rounded up a selection of stats to try to illustrate how the pandemic has impacted, and continues to impact, the ecommerce industry. We’ll update this post regularly as the world of online shopping continues to evolve.

Click the contents below to jump between sections…

1. Latest
2. Ecommerce penetration
3. Amazon and marketplaces
4. Customer experience
5. China
6. Holiday shopping, Black Friday and Singles Day

You can also read Econsultancy’s marketing and advertising stats roundup, again looking at the impact of Covid-19, and our fashion ecommerce stats roundup and online grocery roundup.

1. Latest

Ecommerce payment transactions to exceed $7.5 trillion globally by 2026

A new study from Juniper Research has forecast that the value of global ecommerce payment transactions will exceed $7.5 trillion globally by 2026, up from $4.9 trillion in 2021 – a growth rate of 55%. Juniper Research predicts that this growth will be driven by “retailers offering compelling omnichannel retail experiences that increase user ecommerce spend”, and that online, mobile and physical retail locations will all be instrumental to retailers’ future success.

It also found an “increasing appetite” among consumers for alternative payment options at ecommerce checkouts, such as Open Banking-facilitated payments and one-click digital wallet payment. China is predicted to account for more than 37% of global ecommerce payments by transaction value by 2026, which Juniper Research attributes to the country’s “established and extensive eCommerce and payments landscape that provides greater convenience for users via easily accessible alternative payment methods.”

Accordingly, researchers recommend that retailers ensure that their payment options match evolving consumer preferences to avoid being left behind, prioritising Open Banking-facilitated payments, digital wallets and cryptocurrencies. They also encourage payment providers to support Buy Now, Pay Later (BNPL), in order to capitalise on the continued appetite for ecommerce amid the ongoing Covid-19 pandemic.

Amazon’s UK sales jumped 20% in 2021, up 82% on pre-pandemic levels

Retail Gazette reports that Amazon’s sales figures for its UK business show that the ecommerce and tech giant brought in £23.6 billion in 2021, up from £19.6 billion in 2020 – a jump of 20%. Amazon’s UK sales are also up 82% on the £13 billion the company made in 2019, before the Covid-19 pandemic took hold.

While not as huge as the jump from 2019 to 2020, in which UK sales for Amazon surged 51% during a year dominated by lockdowns, isolation and brick and mortar store closures, the increase is still significant and points to the continued importance of ecommerce in a world transformed by the pandemic, as well as the continued dominance of Amazon in the online shopping arena.

Overall, Amazon’s net sales for the full year 2021 increased by 22% to $469.8 billion, up from $386.1 billion in 2020. Its operating income also increased to $24.9 billion, up from 2020’s $22.9 billion, while net income increased to $33.4 billion, up from $21.3 billion in 2020.

Irish spending on local websites rose by 41% in 2021: PayPal

Recent research carried out by PayPal, the Retail Trends and Spends Study, has revealed a significant rise in spending by Irish consumers on local websites in 2021. The study, which surveyed 1,001 Irish consumers in November 2021, found that the average annual spend by Irish shoppers on websites within the Republic of Ireland rose from 357€ in 2020 to 503€ in 2021, an increase of 41%.

Irish consumers’ spending on non-Irish websites averaged 329€, with more than three quarters (79%) of Irish respondents shopping online internationally in 2021. UK websites were the most popular shopping destination, with 74% of consumers buying from them, followed by non-UK European websites (48%) and Chinese websites (28%). Perhaps surprisingly, only 16% of respondents bought from websites based in the United States.

The study also revealed the extent to which Irish consumers’ buying choices and payment habits have been permanently shaped by the pandemic. More than half (56%) of Irish consumers say the pandemic has changed the way they pay for products and services, with close to three quarters (73%) now preferring cashless transactions. Close to half (49%) of respondents also said that they would do all of their shopping online if they could, with 25-34-year-olds being the most enthusiastic about this (with 54% in favour), versus just 24% of over-55s.

Why ‘buy now, pay later’ services are booming in ecommerce

2.Ecommerce penetration

Almost half of all UK non-food retail sales took place online in 2021, notching up double-digit growth

The latest BRC/KPMG Retail Sales Monitor has revealed that close to half of non-food retail sales in the UK – 46.9% – took place online during 2021, and that ecommerce sales of non-food items for 2021 as a whole were 14.3% ahead of 2020, as reported by Internet Retailing.

This otherwise strong growth tailed off somewhat at the end of the year, however: in December, 45% of non-food retail sales took place online, down 13.9% from 2020, in which 52.5% of non-food retail sales were online. While the UK had just exited its second national lockdown at the time, tier restrictions meant that many non-essential retail stores were closed, driving more spend online.

Paul Martin, UK Head of Retail at KPMG, noted that footwear was the only online category to see “mild growth” over the Christmas period in 2021 as “overall online sales continued to decline, falling by over 8% in December albeit against strong comparators in 2020.”

Helen Dickinson, chief executive of the British Retail Consortium (BRC) said that the overall double-digit rise in non-food ecommerce sales in 2021 was a “testament to retailers’ huge investments in their online platforms”, and that retailers had done well to weather the challenging trade conditions throughout the year. She warned, however, that retail will face “significant head winds” in 2022 due to a variety of factors including rising inflation, increasing energy bills, and an oncoming National Insurance hike set for April.

“It will take continued agility and resilience if they are to battle the storm ahead, while also tackling issues from labour shortages to rising transport and logistics costs,” she concluded.

Total time spent in shopping apps on Android in 2021 reached more than 100 billion hours globally

App Annie’s State of Mobile 2021 report has revealed that the total time spent by Android users in shopping apps globally came to more than 100 billion hours in 2021, up from just under 85 billion in 2020.

This means that the amount of time spent in shopping apps globally has more than doubled since 2018, when Android users spent 48.7 billion hours in retail apps.

According to the report, fast fashion apps, social shopping apps, and “mobile-savvy big-box players” saw the strongest movement in 2021. The three regions that saw the most growth in shopping app time on Android were Indonesia (up by 52% year-on-year), Singapore (up 46% YoY) and Brazil (up 45% YoY).

The most-downloaded shopping app worldwide in 2021, according to App Annie’s data, was Indian ecommerce app Meesho, followed by Singaporean Shopee at #2. Chinese ultra-fast fashion giant Shein took the third spot, while Alibaba.com came in fourth. Fifth was AJIO, an Indian fashion and apparel shopping app owned by retail giant Reliance Retail. The download rankings combined data from both Google Play and Apple’s App Store, save for in China, where the data came from the App Store only.

UK online clothing sales expected to overtake in-store in 2022

According to a report from Retail Economics and Eversheds Sutherland, online sales of clothing rocketed by £2.7 billion over the course of the pandemic, but total sales fell by £9.6 billion. As a result, the dramatic shift to ecommerce in this category over the past 18 months has meant online clothes shopping could overtake in-store purchases by as soon as 2022, ahead of previous expectations that it would happen in 2025.

If this occurs, Britain would be the first European nation where the majority of clothing is bought from online sources. The next closest market – the Netherlands – isn’t due to cross this threshold until 2025, while Germany and France aren’t predicted to do so until several years after that.

The permanency of the shift to online clothes shopping is most potent among British consumers, with more than one-third (36%) stating they would stick with their changes in habits brought about by the pandemic. This is compared to an average 31% of consumers across the rest of Europe.

While online-only apparel retailers will no doubt benefit from this moving forward, there are grave predictions for lost revenue in in-store locations. Among the four European countries analysed, the report indicated that clothing stores will lose €8 billion in total sales per year thanks to new online shopping habits.

Global online sales grow 11% year-on-year in Q3 2021

Salesforce’s Q3 2021 Shopping Index reveals global online sales increased by 11% year-on-year in the three months to September, compared to a massive 63% growth in Q3 2020. This figure is also a notable rise from just a 2% uplift in the previous quarter of 2021 as it faced tough competition from the boom in ecommerce transactions at the height of the first wave.

Consumers in Eastern Europe are particularly keen on shopping online, with ecommerce in the region growing faster than the average global rate. During the three-month period, it experienced a 40% jump in sales versus Q3 2020. Meanwhile, the UK saw a 20% increase.

The UK also experienced a higher-than-average conversion rate against the global 2.4% average, ranking third overall at 2.8%, behind Australia and New Zealand (3.6%) and the Netherlands (3.2%).

After a volatile 18 months, average shopper spend per-visit levelled out in Q3 2021 to $2.80, just one cent lower than the amount reported in Q2. Furthermore, average order value increased from $94.56 in Q3 2020 to $103.43 in Q3 2021, demonstrating increased consumer confidence and less Covid-19 uncertainty.

2021 product subscriptions drop notably in the US

SaaS brand Attest has released an October 2021 report which shows interest in product subscription brands has begun to subside in the US after experiencing high levels of new sales during 2020.

Forty-one percent of US consumers say they currently have an active subscription, down from 47% a year ago. Those with multiple subscriptions have declined as well, dropping from 21% to 18%, while additional data shows that the number of shoppers looking for new product subscriptions has also waned, from 18% in 2020 to 14% in 2021.

Interestingly the number of consumers surveyed that said they have never subscribed to one of these brands has remained the same – 29% – for the last two years, revealing brands have been largely unsuccessful at encouraging firm non-subscribers to convert.

Food and drink subscriptions continue to be the most popular among the US population, with more than one-third (37%) of respondents claiming they subscribe to products in this vertical. Ranked second are personal care/health and fitness subscriptions (36%), followed by pet subscriptions (32%), which have seen the largest jump in growth in recent months, up from 5^th place in 2020.

Despite a drop in active subscriptions, there remains an openness among 65% of Americans to the possibility of purchasing one in the future. Moreover, the percentage of people that say they are unlikely to has reduced from 27% to 21%, meaning there is plenty of opportunity for brands to tempt their audiences into buying subscription products moving into 2022.

48% surge in global ecommerce app downloads from Jan-July 2021

AppsFlyer’s State of Ecommerce App Marketing 2021 report reveals a 48% global surge in downloads of online shopping apps on mobile between January and July, rising 55% on Android devices and 32% on iOS.

According to the study, the fastest growing regions for online shopping app downloads include markets like Pakistan (up 240% year-on-year on Android), Turkey (up 204% on iOS) and Pakistan (up 140% on Android).

Consumer spending via apps is growing alongside these downloads, with data indicating a 55% increase in worldwide consumer spend on the format between March and July compared with the same period in 2020.

70% of Britons surveyed prefer online shopping to in-store, up from less than half pre-pandemic

Reuters reports new Q3 2021 research from finance startup Credit Karma that reveals 70% of Britons now prefer shopping online and on mobile, up from less than half pre-pandemic.

Meanwhile, more than half also claimed that their online shopping behaviours had increased since the onset of coronavirus, but that their personal finances had been negatively affected as a result. Consequently, 60% of those surveyed admitted to using buy now, pay later services in order to better manage their new spending habits.

The data, which studied responses from more than 1,000 British consumers, found that credit solutions like these are not the only methods shoppers have been implementing over the last 18 months. Usage of online and mobile banking has seen a considerable acceleration, thanks to many branches closing either temporarily or permanently during lockdown. Now, just 8% of consumers prefer to pop into a physical branch than they do using online services, down from 19% before the pandemic began.

UK charities sell 185% more items online in six months to August 2021 compared to the same period a year before

Internet Retailing reports findings from Shopiago that indicate UK charities have sold 185% more items online in the six months to August 2021 compared with the year before. Many of these sales were conducted via marketplace sites like eBay, analysis suggests, as non-profit organisations turned to online channels in an attempt to plug an estimated £10 billion total loss in funding that came with the pandemic.

Certain donation categories have seen a particularly large rise in interest from online shoppers. After an unprecedented spike in pet ownership over the last 18 months, Shopiago has seen a 162% increase in the price of second-hand pet supplies being sold via its platform between February and August 2021. Resold donations in the baby category also experienced a 73% rise in pricing over the same period, while those in the toys and games category spiked 104%.

Unsurprisingly, as many employees continued to work from home, the number of laptops, tablets and similar equipment sold online by UK charities grew by an impressive 110%.

These upward trends indicate that non-profit organisations have been embracing the power of ecommerce for selling donations (and reaching a larger audience of shoppers) since brick-and-mortar stores were forced to close during the lockdown. In a statement, Thom Bryan, Head of Product at Shopiago, said of the shift,

“More and more UK charities are realising that there is a huge opportunity to generate funds by listing shop donations online and so in future we look forward to growing insight on how trends develop and how consumer tastes change.”

Ecommerce penetration in South East Asia projected to grow 85% year-on-year by end of 2021

Facebook and Bain & Company’s latest annual SYNC South East Asia report has revealed that ecommerce penetration in South East Asia is projected to grow by 85% by the end of 2021, vastly outpacing the growth of other major markets like India (estimated +10%) and China (estimated +5%). Data suggests almost 8 in 10 people above the age of 15 in SEA will be digital consumers by the end of 2021, while a further 70 million people in the region have begun shopping online for the first time since the pandemic started.

Digital consumer spend per person in South East Asia is projected to increase by 60% over the course of 2021. The number of consumers who say they ‘mostly shop online’ has increased by 35% year-on-year, and 80% of the channels they use to browse and discover new products are now online. Shoppers within the region have also bought items from 60% more online product categories than they did in 2020, with Indonesian shoppers leading the way by purchasing from an average 8.8 different verticals annually.

In the next five years, analysis predicts SEA’s ecommerce GMV will skyrocket to US $254 billion, almost double what it is expected to reach by the end of 2021 and equating to a compound annual growth rate of 14%. Ecommerce executives who were interviewed for the study believe that, thanks to a mostly hybrid model of working, 75% of the hours consumers spent shopping online from home in 2021 will be retained after the pandemic subsides. This is corroborated by a majority of consumers indicating they would either increase or maintain their levels of spending on key categories.

Shopify revenue up 57% year-on-year in Q2 2021 as the ecommerce boom continues

Shopify posted revenues of $1.12bn in Q2 2021, a 57% rise year-on-year and a better result than estimates from experts predicted ($1.05bn). The company’s Gross Merchandise Volume (GMV) also rose significantly, up 40% to $42.2 billion.

Perhaps most impressive of all was a 67% increase in Shopify’s Monthly Recurring Revenue (MRR), meaning the amount of revenue the brand can expect from recurring payments of users that are billed monthly. In its financial statement, Shopify’s MRR was recorded at $95.1m up from $57m. Subscription solutions, meanwhile, were also 70% higher, thanks to a wave of new merchants joining the platform since Q2 2020.

91% of ecommerce CMOs believe their brand’s revenue will grow in the next 12 months

Netimperative reports research findings from ChannelAdvisor and CensusWide which reveal 91% of 304 ecommerce CMOs surveyed believe their brand’s revenue will grow over the next 12 months beginning August 2021.

An additional 92% said that they are also more confident in their company’s ability to attract new online customers than they were before the pandemic began, with nearly one-third claiming this will become ‘much easier’ for them.

This could be down to increased investment in digital advertising now that initial uncertainty has subsided. Four in every five ecommerce brands that took part in the study explained that their digital marketing spend has risen in 2021, while another 91% predict this will rise further over the coming 12 months.

Drilling down, digital marketing efforts have mostly been dedicated to enabling D2C opportunities for consumers, with 36% of CMOs saying their ads were driving traffic directly to their brand websites. Meanwhile, almost three in ten said their clickable digital advertising directed customers to marketplaces like Amazon, and another 20% said they were pointing traffic to retailer partner websites.

As a result of continued expected ecommerce success, the data found ecommerce expertise will be the most in demand type of talent for the sector during 2021 and early 2022. This is followed by marketing talent, while demand for web developers ranked third and senior strategic expertise fourth.

Study shows retail profit margins down from 6.4% to 4.5% in a decade

A June 2021 study by management consultancy Alvarez & Marsal, in partnership with Retail Economics, has found that pre-tax profit margins for retailers in six European countries (France, Germany, Italy, Spain, Switzerland and the UK) have fallen from 6.4% to 4.5% in the last 10 years, and is forecast to drop to 3.2% by 2025. The chief contributing factor? Likely ecommerce. The study found a negative correlation between share of sales made online and margins.

The study also forecasts that, if the pandemic hadn’t happened, the profit margins in the countries studied would be 3.7% by 2025, half a percentage point higher.

For more on the study, download it here or see a summary in QZ.

9 out of the top 10 global ecommerce companies saw double-digit revenue growth in 2020

Analysis from GlobalData shows that 9 out of the top 10 global ecommerce companies (by revenue) experienced double-digit growth in 2020 as new consumer habits swayed in their favour.

Pinduoduo came close to triple-digit year-on-year revenue growth at 97.6%, raising its total 2020 sales to $8.6 billion, while South Korea’s top marketplace Coupang saw a 90.8% growth, ranking it 7^th overall for 2020 revenue at $12 billion. Amazon unsurprisingly topped the list at a reported revenue of $386.1 billion, although its growth was far lower at (a nevertheless impressive) 37.6%.

Other top performers included US-owned home furnishings marketplace Wayfair, which saw a 55% year-on-year revenue increase thanks to a jump in interest from consumers looking to carry out home improvements, and Alibaba which posted 40.9% growth. Meanwhile, Zalando, eBay and Rakuten experienced a 25.4%, 18.9% and 18.9% rise in annual revenue respectively.

UK online sales volumes dropped by record amount in May 2021

The IMRG Capgemini Online Retail Sales Index has found that online sales in the UK fell by 9.1% in May 2021 versus a year earlier, Charged Retail reports – the largest drop on record since the Index’s inception in 2000. It is worth noting that this most recent comparison is being measured against a 61% boom in growth recorded in May 2020, which was driven by the first peak of the pandemic.

Sales growth across most retail categories is now flatlining, with some such as health and beauty declining by 29.2% year-on-year. Multichannel retailers saw the largest rate of drop off, -13.9%, as consumers increasingly opted to shop in-store instead. Online-only retailers, however, experienced a much smaller decline of -1.34%. Also hit hard were budget retailers, seeing a -12.8% drop off in sales, in contrast to a +0.2% growth for their luxury counterparts.

Despite this news, online sales overall remained significantly higher than those reported in 2019, before the coronavirus outbreak shifted the landscape of the retail sector. In fact, sales volumes for May 2021 are 46% up compared to May 2019.

British consumers spent £113 billion online in 2020

A June 2021 report from Ofcom has found British consumers spent a total £113 billion online throughout 2020, a rise of 48% on the year before. Online sales in the food and drink category experienced the highest rise of all, up a massive 82% year-on-year, while the household goods category saw a 76% spike. Online share of spending on household goods grew from 17% in Q1 2020 to 42% in Q2 2020 alone.

The online spending power of under-18s has also risen since the first lockdown began in March 2020, driven somewhat by the increased adoption of digital pocket money apps and pre-paid bank cards. According to research, this trend is continuing into this year – teenagers spent 68% of their money online in March 2021 and just 32% offline.

Meanwhile, spend on online entertainment and visual media, which includes streaming services and video games among other products and services, grew to £5.6 billion over the course of the year. Of this surge, audio subscription streaming increased by 23%, driving revenue for the sector up by 19% to £1.3 billion. Audio subscription streaming through platforms like Spotify and Apple Music now accounts for 87% of online audio revenues, up from 84% in 2019.

Overall, the amount of time an average UK adult spent online per day in 2020 was 3 hours and 37 minutes, rising to 4 hours and 34 minutes in 18-24 year olds. This is a substantial half an hour more than the next most digitally focused population in Europe – Spain – which recorded an average 3 hours and 6 minutes online every day.

Global ecommerce sales rose to $26.7 trillion in 2020, making up 19% of all retail sales

Analysis from UNCTAD has found global ecommerce sales rose to $26.7 trillion in 2020, making up 19% of all retail sales (up from 16% in 2019). This increase in share, which the UN has called ‘dramatic’, is reflective of the huge worldwide shift towards online shopping since the onset of coronavirus.

Zooming in, it appears some markets saw a more notable jump in ecommerce sales than others. Data shows that the Republic of Korea experienced the most growth in share, where the proportion of online sales rose from one in five (20.8%) to more than one in four year-on-year (25.9%). For context, China came in at one percentage point lower for total ecommerce penetration in 2020.

The UK also saw big growth compared to regional counterparts, growing from an overall 15.8% online share of retail sales to 23.3%, placing it third in a list of growth in seven major economies which also includes the US, Australia, Canada and Singapore.

Singapore’s ecommerce growth marks it as one to watch as its ecommerce infrastructure develops at a rapid pace. While just over one in every ten retail sales are now made online in the country (11.7%), this figure increased from a tiny 5.9% in 2019.

Kingfisher’s online penetration grew from 7% to 18% from mid-2019 to the end of 2020

Online sales penetration across Kingfisher’s brands (which include Screwfix and B&Q) has soared from just 7% in mid-2019 to 18% by the end of 2020, diginomica reports.

In an interview, the retailer’s CEO, Thierry Garnier, revealed just to how extent Kingfisher’s online channels have benefitted from changed shopping behaviours brought about by the pandemic. Its group ecommerce sales rose 158% year-on-year in 2020 to £2.3 billion, with click and collect becoming the fastest growing fulfilment channel, according to its data.

This is thanks to 10 million new customers shopping with Kingfisher brands since the onset of the coronavirus. Recent surveys conducted of their customers showed that 18-35 year olds were driving a large chunk of overall sales, with 20% carrying out DIY projects for the first time, 55% increasing the amount of DIY they have done and 65% feeling more confident in their DIY skills.

B&Q alone experienced a 117% jump in online sales during 2020, while Screwfix performed even better at a 146% increase.

Mobile transactions saw the biggest shift for the retail giant. Sales on mobile devices now account for 62% of Screwfix’s ecommerce sales, while it accounts for 56% of online orders across all Kingfisher brands – more than a 200% increase year-on-year.

UK January 2021 online retail sales up 74% year-on-year

IMRG Capgemini Online Retail Results for January reveal that UK online sales grew 74% year-on-year in January 2021.

Typically, online sales in January are fairly restrained as consumers recover from the Christmas shopping frenzy that occurs in November and December. However, a lockdown announcement for the new year caused a record-breaking growth in sales, with results also far above the 3, 6 and 12-month rolling averages – 46.4%, 44.9% and 41.3% respectively, according to analysis.

Omnichannel retailers were the biggest winners in January, seeing a 99.8% year-on-year rise in sales across their online channels compared to their online-only counterparts, which experienced a smaller (but nevertheless impressive) 31.2% growth. Meanwhile, mobile ecommerce sales soared 169.1%.

Data shows a multitude of categories benefitted from increased online shopping across the month, including health and beauty, which saw sales up 102% year-on-year, and beer and wine (up 105% year-on-year), despite many consumers partaking in the Dry January initiative. Electrical sales remained very high – up 206% – and there was even some promising news for fashion retailers as clothing sales grew 22%.

UK online sales accounted for 35.2% of all retail in January 2021

Data from the ONS has found UK online sales in January 2021 accounted for 35.2% of all retail, a record that beats even last May’s high of 34.1%, when the coronavirus crisis was at its first peak.

While retail sales volumes were predictably down 8.2% on December 2020, the proportion of online spending was higher in January than it was in the busiest two months of the retail calendar, November and December, which saw online account for 31.8% and 29.6% of retail sales respectively.

Amid a third national lockdown, 50% of textile, clothing and footwear sales came through online channels in the first month of the year, declining to 37.4% for department store sales and 31.5% for household goods stores. Although online made up just 12.2% of food sales (including grocery) in January, it saw the highest year-on-year growth of 143.5% compared to the same month in 2020.

With little sign of lockdown restrictions lifting any time before spring, it is possible this trend will continue and perhaps experience even higher record proportions of online sales in results published over the next few months.

A Jan 2021 survey found that since the pandemic began, 46% of UK consumers purchased a product online that they had previously only ever purchased in store

A January 2021 outlook report from Retail Economics and Natwest has found that, since the pandemic began, nearly half (46%) of UK consumers have purchased a product online that they had previously only ever purchased in store.

When asked directly, 32% of consumers surveyed said they expect to continue with their new ecommerce habits in the future, a figure that rises to 40% in 45-54 year-olds.

More affluent households are also more willing to stick with the change. Data shows a positive correlation between those that believe their online shopping behaviours will become permanent and the amount of money they are prepared to spend on products. This is particularly true for higher earners aged between 25 and 44.

Fifty-seven percent of respondents from households earning £96,000 or more per year agreed or strongly agreed that they are likely to spend a higher proportion of their income on retail products online than in store, even after the pandemic subsides. By comparison, just 31% of households earning less than £19,000 said the same.

Global consumer mobile spending is expected to reach $270 billion by 2025

Global consumer spending on mobile is expected to reach $270 billion by 2025, having been accelerated by increased mobile activity during the pandemic, according to SensorTower’s 2021-2025 Mobile Market Forecast report. This figure is almost 2.5 times the $111 billion spent throughout 2020 (+30% on 2019), reflecting mobile’s continued dominance over other devices.

The compound annual growth rate across mobile app stores is also predicted to be very healthy over this five-year period, at 21% and 17% respectively on the App Store and Google Play. Meanwhile, app downloads for the 2020 calendar year rose 24% to 143 billion – the highest levels seen since 2016 – and are forecast to reach 230 billion by 2025.

UK consumers led the way last year in spending in Europe, totalling an equivalent $2.9 billion, closely followed by Germany ($2.8 billion) and France ($1.7 billion). By 2025, mobile consumer spend in these regions is expected to grow by 181%, 164% and 170% respectively to equal a collective $20 billion.

Zooming in, SensorTower forecasts that consumer spending on non-game apps, such as streaming service and ecommerce apps, will overtake that of games on the App Store by 2024, while non-game app spend growth will surpass growth from mobile games on Google Play. Overall, non-game apps will account for 49% of all revenue made across both stores by the end of 2025.

2020:

Shopify’s Q4 2020 revenue rose 94% year-on-year amid ecommerce boom

Shopify’s fourth quarter 2020 revenue rose 94% year-on-year to $977.7 million, the company announced in February. This figure helped boost Shopify’s overall revenue to $2.9 billion (+86%) across the full financial year.

Its Subscriptions Solutions revenue rose 53% in Q4 2020 alone, due to a number of new merchants joining the platform, the statement explained, likely in a bid to capitalise on the golden quarter rush, . GMV also grew 99% year-on-year to $41.1 billion, as many businesses saw record online sales of goods over the period. In 2020, its merchants’ Black Friday weekend sales reached over $5.1 billion versus $2.9 billion across the same event in 2019.

Shopify has been heavily investing in its product by developing its software, support capabilities and fulfilment processes, as well as introducing Alipay as a payment method. In April, the launch of ‘Shop’, its mobile shopping assistant, allowed customers to personalise their shopping experience to enhance discovery, use accelerated checkout, take advantage of Shopify’s own buy-now-pay-later scheme Shop Pay, and track their orders. Shop garnered 100 million registered users by the close of 2020 and has 19 million Monthly Active Users as of early 2021.

Up to 70% of John Lewis sales came from its online channels in 2020

Online channels accounted for 60-70% of John Lewis sales over the course of 2020, up from 40% before the pandemic, according to details from the retailer’s report Shop Live Look 2020.

The data reveals mobile and desktop browsing of the brand’s website increased by 55% year-on-year, while tablet traffic declined by a whopping 41%, reflecting wider trends in device popularity across the retail industry.

Evenings remained the most popular time to browse, but online orders were more spread out throughout the day, peaking between 11am and 4pm, whereas they were typically placed between 7pm and 10pm in 2019. Meanwhile, the number of John Lewis purchases destined for home delivery rose a quarter on 2019, quadrupling in the case of Waitrose.com orders, and 55% more products were sent to others as gifts.

Some of the most popular items bought by John Lewis customers in 2020 included beauty tech (such as electronic facial devices) – up 178% – chess sets (up 121%) and nostalgic toys, like Scalextric kits (up 100%).

However, sales of products such as suitcases, high heels and clutches and ‘party handbags’ all saw dramatic declines of 69%, 62% and 56% respectively thanks to customers’ dramatic lifestyle changes brought on by the pandemic.

Uber Eats revenue from online orders was up 224% year-on-year in Q4 2020

Uber has announced that revenue acquired from online food delivery was up 224% year-on-year in Q4 2020 (19% quarter-on-quarter) to $1.36 billion, with delivery bookings rising 128%.

This coincided with the continued rollout of the newly designed Uber mobile app, which now integrates its ride hailing and food delivery services in an attempt to incrementally increase user and revenue growth across both of its offerings. According to its financial statement, the app now drives more than 10% of Uber Eats first-time orders. Meanwhile, the number of restaurants enlisted on the Uber Eats platform rose 75% in the final quarter of 2020, indicating a huge growth in interest from both retailers and customers in this arm of Uber’s business.

Additionally, monthly active platform consumers grew 19% quarter-on-quarter to 93 million, with the average customer spending $60 per month across five or more transactions.

Despite the successes of its food delivery service, the number of people booking rides through its app has been hit dramatically by continued restrictions imposed by regional governments. Ride bookings fell 47% in Q4 2020, resulting in a 52% year-on-year decline in ride revenue over the period. High demand for delivery has therefore partly made up for the shortfall in ride hailing over 2020, however, despite Uber’s total revenue rising 13% quarter-on-quarter, it declined by 16% across the whole of 2020.

UK online sales growth hit +36.6% year-on-year for 2020

Total online sales growth in the UK rose by 36.6% year-on-year in 2020 – the largest growth seen since 2007, according to data from the IMRG Capgemini Online Retail Index.

After unprecedented uptake of online shopping out of necessity, local and national lockdowns throughout November and December (traditionally the busiest shopping period of the year) helped to boost the overall yearly figure to even loftier heights. Online retail sales in December remained slightly higher than the year average at +37%, while Black Friday events caused November to take the crown for peak performance at +39%.

Multichannel retailers saw a particularly bumper year for online sales, seeing them surpass the rate of growth of online-only competitors for the first time since 2017 (+57% year-on-year vs. 9.1%). Categories that experienced the greatest success over 2020 were garden (+222.5%) and electricals (+90.8%), the former of which is typically sold by multichannel retailers. However, online sales of clothing performed quite poorly, up just 1.3% in 2020 compared to growth of 8.2% the year before.

There was also good news for mobile commerce, which saw a huge 73% year-on-year uplift.

Cross-border ecommerce sales grew by 82% year-on-year in 2020

Data from eShopWorld has revealed that cross-border ecommerce sales grew 82% year-on-year in 2020, as globally optimised retailers cashed in on new opportunities.

Sales analysis shows international online shopping slowed quite dramatically in March 2020 before picking up at speed again in April and remaining high throughout the rest of the year. In April alone, cross-border sales exceeded 100% year-on-year growth before peaking at +141% in July.

A survey of over 22,000 consumers from 11 different countries found that 52% claimed to have made six or more cross-border purchases online since the beginning of 2020. Respondents cited lower cost (such as taxes and shipping) and better availability of products than in their home region as key purchase drivers.

The Phillipines ranked highest in the top 10 growing markets for international online sales, experiencing a whopping 258% year-on-year growth in 2020. This was followed by Morocco, Chile and Puerto Rico at 215%, 211% and 203% growth respectively.

US ecommerce penetration accelerated by 10 years in 90 days in Q1 2020

The rate of ecommerce penetration in the US grew by 10 years in a 90-day period in 2020, reaching around 33%, according to data from McKinsey.

The result of this acceleration, brought about by rapid digital transformation, has caused the gap in corporate profits between the best and worst performing brands to widen further than ever before. In total, McKinsey predicts the top quintile of industries that has fared well over the course of the pandemic could accumulate $335 billion additional profit, while the quintile that has fared the worst could lose $303 billion.

Organisations that have invested in superior customer experiences, following the shock of the coronavirus outbreak, have emerged stronger than they did before it began. It is thought that these brands have seen triple cumulative shareholder returns against other companies, according to analysis.

These figures are despite very volatile retail performance at the time, with April 2020 seeing the largest drop in US retail sales ever recorded. Fifty percent of American households were reported to be actively reducing their household spend, while a further 20% abandoned past brand loyalty in favour of others that were more convenient, inexpensive or had better stock availability.

See how the U.S. has leapt 10 years forward in 90 days’ time from physical channels to e-commerce. Also, how the acceleration in digital transformation by companies is widening the gap between leaders & laggards and more. https://t.co/hybQkCcBmu pic.twitter.com/mBt7mMc0kI

— McKinsey & Company (@McKinsey) November 9, 2020

Digital Transformation Monthly – 2020 in Review

3. Amazon and other marketplaces

70% of global consumers say online marketplaces are the most convenient way to shop

The State of Online Marketplace Adoption report by Mirakl, which surveyed 9,000 global consumers on their online shopping habits, found that 70% believe online marketplaces are the most convenient way to shop, with two thirds saying they prefer ecommerce sites with online marketplaces.

The report drew together responses from nine different countries – Australia, France, Brazil, Germany, Singapore, Italy, Spain, the United Kingdom, and the United States – with 1,000 consumers surveyed from each. It found that 57% of online shoppers said they shopped on marketplaces “exclusively” or “a lot” in 2021; this percentage has held steady since 2020, and is up from 42% in 2019, representing a 35% increase. Regionally, Brazil has experienced the largest percentage increase in consumer use of online marketplaces since 2019 at 75%, followed by Singapore and Australia at 65% each.

When asked for the reasons that they prefer to shop on online marketplaces, the most commonly-cited was price, given by 62% of consumers. Following that, the second-most compelling reason was product selection, cited by 53% of consumers. Joint third were delivery options and the shopping experience, each cited by 43% of respondents.

“Ecommerce is mostly marketplaces”: Colin Lewis on how brands can seize the marketplace opportunity

Ebay’s GMV down 7%, active buyers down 2% in Q2 2021

Following Amazon’s latest set of financial results, which revealed its slowest revenue growth since the start of the pandemic, eBay is also showing some signs that the ecommerce boom may be starting to wane for the internet’s most popular marketplaces.

In the three months to June 30^th, eBay experienced a better-than-expected 14% year-on-year rise in revenue, reaching $2.7bn in sales. It also saw an increased number of global sellers flock to the platform, increasing 5% over the period to reach 19 million.

However, its Gross Merchandise Volume (GMV) declined by 7% to $221bn and its active annual buyers fell by 2%. It is worth noting that this comparison has been made against an unprecedented quarter for sales and customer growth for eBay in Q2 2020.

While these declines are fairly modest, it does indicate a turning tide for ecommerce as marketplaces and online retailers alike try to retain the numerous customers they have attracted over the pandemic. Overall, eBay’s GMV remains above pre-pandemic levels recorded two years prior (Q2 2019), but its annual active buyers are 23 million fewer.

Ebay says it predicts its Q3 earnings will total between $2.42-$2.47bn, a lower estimate than experts predicted and a downward trend for its quarterly revenue, which saw a peak of $3bn in Q1 2021.

Amazon revenue rises 27% in Q2 2021, marking its slowest growth since the pandemic began

Amazon saw its revenue rise 27% year-on-year in the three months to 30^th June 2021, totalling $113bn. While sales for the ecommerce giant remain healthy, this figure did not meet the $115.2bn revenue predicted and marked the slowest rate of growth for the company since the pandemic began.

Amazon Web Services (AWS) continued to perform strongly, with net sales rising 37% to $14.8bn – the second quarter in a row to record over 30% growth across this arm of the company. This, new Chief Executive Andy Bassy explains, is a result of ‘more companies bring[ing] forward plans to transform their businesses and move to the cloud’. Meanwhile, Amazon’s advertising revenues skyrocketed by 87% versus the same period of 2020 as brands ramped up their investments.

Despite the results, Prime Day appeared as successful as ever for Amazon. Prime members bought more than 250 million items during the event, with its Fire TV Stick ranking as the most popular purchase. Customers also spent almost double the amount of money ($1.9bn) than in 2020 on products from third-party sellers in the annual Spend $10, Get $10 promotion, which typically runs for two weeks leading up to the big day.

Amazon is now on course to become the UK’s largest retailer by 2025

Thanks in part to a surge in sales during the pandemic, Amazon is now on course to become the UK’s largest retailer by 2025, Charged Retail reported in June 2021 from findings from Edge by Ascential. It is predicted that the ecommerce giant’s total sales will outpace that of Tesco in the next four years, at £77 billion versus £76.1 billion respectively, thereby bumping the popular supermarket off the top spot.

Amazon’s compound annual growth rate over this period is also expected to be much higher (at 16.3%) than Tesco’s (at 3.5%), which is somewhat due to the marketplace’s gradual increase in share of the UK grocery sector since the start of the coronavirus crisis. Growth in Amazon’s grocery category in 2020 alone rose 17.6%.

As ecommerce becomes an ever more popular way of purchasing food products and groceries, this will no doubt give online-only retailers like Amazon gain the edge over those with brick-and-mortar stores and omnichannel offerings. In fact, data suggests that 57.4% of added sales between now and 2025 will take place online, helping the retail sector accelerate by £123.6 billion to reach a £500 billion market value.

Sainsbury’s sales are predicted to rise 4.5% to £42.2 billion by 2025, which will rank the supermarket as the third largest retailer by that time, while Asda is likely to come in fourth place with total sales of £26.7 billion.

Alibaba serves 1 billion active users on its ecommerce platform

In a press release announcing results for the full fiscal year 2021, Alibaba revealed it has now served a total 1 billion active users on its ecommerce platform, including 240 million customers based outside of its primary market of China. Active users in China have grown by 85 million year-on-year, or 32 million quarter-on-quarter. Additionally, mobile Monthly Active Users reached 925 million, up by 79 million on the same period to March 2020.

The year ending March 31^st 2021 has marked one of the strongest performances for the retailer to date – total revenue for the group increased a huge 41% in the full year to an equivalent $109.5 billion, and revenue for the quarter alone grew 64% year-on-year.

Overall GMV rose 21% across the year, mostly driven by the home furnishing and FMCG categories, and later by apparel in the first three months of 2021. Further data also found that the longer a customer has been shopping on Alibaba platforms, the higher their annual spend and the more product categories they purchased from. Average annual spend was measured at $1,404 for the fiscal year 2021, however, retention remained high among existing Alibaba customers regardless of their basket size.

The Taobao app endured as Alibaba’s most popular social retail platform in 2021, and indeed the whole of China, as its livestreaming capability continued to make waves with sellers. GMV for Taobao Live climbed to $76.3 billion, reflecting the ever-growing interest in livestreaming in the region and signalling it to be the next big ecommerce trend in the West.

Amazon revenue jumped 44% year-on-year in Q1 2021

A year on from the start of the coronavirus pandemic, Amazon’s first quarter 2021 results showed just how much online shopping and streaming services have accelerated in that short time. Data from its financial statement shows revenue jumped 44% year-on-year from $75 billion to more than $108 billion, beating analysts’ prior expectations. Meanwhile, ‘other’ revenue, which primarily includes sales accrued from advertising, grew a whopping 77%.

Revenue from its subscription services, including Amazon Prime memberships, digital video, audio and ebooks rose 36% to $7.5 billion, while Amazon Web Services grew 32%. Streaming hours on Amazon’s Prime Video platform are now up more than 70% year-on-year, with over 175 million of its >200 million Prime members streaming TV shows and movies over the period.

Amazon sales grew 38% in 2020 to $386.1 billion

Amazon revealed sales grew a total 38% throughout 2020, reaching $386.1 billion. Meanwhile, sales of its web services (AWS) accelerated 29.5% to $45.4 billion vs. $35 billion last year.

In Q4 2020, usually the most lucrative time of year for Amazon, the company’s sales increased by 44% year-on-year to $125.6 billion, marking its first ever $100 billion quarter. This was no doubt aided by fresh stay-at-home restrictions across the globe as a second wave of the coronavirus began taking its toll. In the same quarter, 175,000 full-time and part-time employees were hired by the marketplace giant to help keep up with demand, compared with just 50,000 hired in Q4 2019.

It claims that the 2020 holiday season was ‘the best ever for independent businesses selling on Amazon’, with worldwide sales averaging 50% higher year-on-year and exceeding $4.8 billion in sales alone over the Black Friday Cyber Monday weekend. US small and medium-sized businesses sold close to one billion products via the marketplace in the last quarter.

This came as Jeff Bezos announced his stepping down from the role of Amazon CEO, instead taking a position as Executive Chairman.

Alibaba posted 37% rise in revenue for Q4 2020, with its cloud computing services growing 50%

In early February 2021, Alibaba posted its financial results from Q4 2020, which revealed a 37% year-on-year rise in revenue to RMB221.1 billion (or US$33.9 billion).

The company’s overall core commerce grew a total 38% over this period, with the Tmall marketplace faring particularly well – it reached 19% growth in physical goods GMV and a 60% rise in the number of international brands and sellers on its Tmall Global platform. As a result, Tmall Global also experienced triple-digit growth in the purchases of products shipped and warehoused overseas.

A portion of its success can be attributed to its record 11.11 Singles Day sales, expanded in 2020 to continue for 11 consecutive days, which created RMB498.2 billion in sales (US$74.1 billion) – an increase of 26% on the same event in 2019. Alibaba also claimed over 470 of its brand sellers made RMB100 million or more during the holiday.

Customer engagement also rocketed. Taobao Live generated more than RMB400 billion (US$61.8 billion) over the course of 2020, highlighting the huge and growing influence of livestreaming on online shopping in the APAC region. Moreover, views of recommended pages displayed on the Taobao app homepage grew a whopping 90% in the fourth quarter alone.

Aside from its retail achievements, Alibaba’s cloud computing business saw a huge 50% year-on-year boost in Q4 2020, making these services profitable for the company for the first time.

UK online reselling jumped in 2020, according to data from top second-hand sites

The Guardian reports online reselling in the UK saw a substantial boost in sales and traffic throughout 2020, according to information collated by top second-hand sites like MusicMagpie.

Sales at the aforementioned brand, which now resells many other products outside of old music, rose 22% over the course of 2020 to around £120 million. Sales of second-hand books via the site grew by a massive 75% in this period, while products like preowned smartphones and games consoles saw sales increase by one-fifth.

The most popular items sold included the series of Harry Potter books, Michael Bublé CDs, PlayStation 4 consoles and old versions of the iPhone.

MusicMagpie’s sales figures follow the same trend as similar sites such as eBay which saw a 30% growth in revenue between March and June 2020 alone. Meanwhile, Depop, a site for selling pre-loved fashion, grew its user base to 18 million since the end of 2019 and ‘experienced record sales’ in the summer, according to the Guardian’s report.

This suggests shoppers are taking a more sustainable and cost-friendly approach to their online shopping behaviours since the coronavirus crisis began, something which could continue past the pandemic as consumers cement their habits.

35% of all UK online purchases during first UK lockdown were made via Amazon

A report from Wunderman Thompson Commerce has revealed that Amazon’s share of the UK ecommerce market rose to 35% during the first lockdown, up from 30% at the end of 2019, highlighting the retailer as one that has benefitted most from the pandemic.

One fifth of the 2000 UK consumers surveyed claimed that their intention to purchase from Amazon after the coronavirus outbreak ends had increased, even though a similar number (21%) said that they were concerned about the company’s growing dominance in the industry.

Sixty-one percent of respondents cited free delivery as a key purchase driver, followed by availability (57%) and price (53%), while the most sought-after change to consumers’ online shopping experience was free returns.

Amazon marketplace sellers thought to have sold an additional $95 billion worth of products in 2020

Marketplace Pulse has estimated Amazon marketplace sellers sold an additional $95 billion worth of products last year than they did in 2019. That’s around $295 billion in total.

Taking its place amongst the winners of the pandemic – which include brands like Walmart, Etsy and Target – Amazon is also predicted to have sold $180 billion worth of products (worldwide) in first-party sales (Amazon Retail), up from $135 billion in 2019 and $117 billion in 2018.

Amazon’s GMV – Gross Merchandise Volume – is thought to have increased by 42% year-on-year in 2020, with its marketplace arm accounting for 62% of its total global GMV (although this equates to just a 2% increase in total share since 2019).

March was a particularly notable month for the marketplace as the coronavirus began to overcome multiple regions of the globe. Products sold via the platform accumulated a 46% share of the top 100 most searched queries related to Covid-19 as consumers rushed to buy essentials and safety equipment like PPE and sanitiser. Meanwhile, more than half of new US Amazon sellers joining the marketplace across the month were located in China, an increase of 39% on the same period in 2019.

Amazon: Lessons and Success Stories

Amazon sales up 37% year-on-year in Q3 2020

A press release outlining Amazon’s Q3 financials has confirmed that the company’s net sales grew 37% year-on-year worldwide, totaling $96.1 billion for the period and surpassing estimates of $92.7 billion. North American net sales were up by 39%, while international net sales rose by 37%.

Sales of its subscription services grew 33% year-on-year, and Amazon Web Services (AWS) grew by 29%. Total profits were up by 200% to $6.3 billion compared to the same quarter the year before, beating Amazon’s previous record of $5.2 billion profit back in Q2.

Ebay’s Q3 revenue rises 25% year-on-year in 2020

Ebay’s Q3 2020 financial statement has revealed that its revenue rose 25% to $2.61 billion compared to the same period in 2019, beating expert estimates of $2.48 billion. In the quarter ending 30^th September, the marketplace also reported that its number of annual active buyers increased by 5% to total 183 million globally.

4. Customer experience

Subscription economy market value due to reach $275 billion globally in 2022

New research by digital technology market research firm Juniper Research has predicted that the global market value of the subscription economy will grow to $275 billion in 2022, up from $224 billion in 2021.

The report, Subscription Economy: Future Strategies & Market Forecasts 2022-2026, evaluated 10 key subscription-based markets and identified that physical goods, digital video, and digital music will generate the highest revenue in 2022. It predicts that increasing adoption of new device types such as smart speakers, as well as the increased availability of streaming content, will drive further adoption of subscriptions to digital services over the coming year.

However, physical goods remain the largest subscription revenue opportunity, according to the report, and are expected to represent 45% of global revenue by 2022. The Covid-19 pandemic is of course a key driver of increased demand in this area, with shoppers “keen to secure reliable sources of medicines and daily essentials” amidst the ongoing pandemic.

The report by Juniper Research also stated that support for alternative payment methods will be key to growth for future subscription-based services. It urged sellers of subscription services to support multiple payment methods such as Open Banking and digital wallets, focusing on the most popular alternative payment forms in their target countries to minimise friction and reduce churn.

Will subscription retailers retain customers post pandemic?

Number of out-of-stock products surged 172% between pre-pandemic and August 2021 in the US

In the US, the number of out-of-stock products online, across 18 product categories, surged 172% between January 2020 and August 2021, according to a report from Adobe Analytics. On a year-on-year basis, products were out of stock 24% more of the time in August 2021 than in August 2020, despite more restrictions lifting in the region this summer.

While the report didn’t reveal specific figures across verticals, clothing is reported to be the category with the highest number of out-of-stock products online as of August 2021. Second comes sporting goods, followed by baby products, electronics and pet products.

Quoted in a CNN Business report, Taylor Schreiner, director of Adobe Digital Insights, said of the figures, “We’ve never seen it as high as this for the 10 years or so that we’ve done this report. It’s a record.”

Part of the reason that out-of-stocks remain so prolific, even as the US and the world emerges from the pandemic, is ongoing supply chain issues. Schreiner warns that shoppers should “make two lists for their holiday shopping”, one being a list containing products they should have shipped early to combat any potential shortages in the run up to Christmas.

54% of global shoppers find browsing for new products more enjoyable online than in-store

As consumers become more and more accustomed to making online purchases, fifty-four percent of global shoppers now prefer online window shopping to browsing instore, according to April 2021 research from Bazaarvoice. The study, conducted on more than 8000 consumers worldwide, has found that they not only enjoy browsing for items online, but also find it less of a hassle.

Indeed, data shows that almost two-thirds (64%) of those surveyed found browsing online easier than doing so inside a brick-and-mortar store, while a further 61% said they discovered new items more frequently online than in store. Analysis of responses revealed the top three reasons for better product discovery online were convenience (55%), greater choice (46%) and the ability to research items and any corresponding reviews (45%).

The report suggests most of this online product discovery is happening on mobile devices. Forty-six percent of consumers claimed they spend their time window shopping on mobile, versus 26% on desktop and 10% on tablet.

However, it seems consumers are significantly more likely to make an impulse purchase, as well as spend big, in store than they are when online shopping.

Buy now pay later firms see a rise in interest over coronavirus

Several buy-now-pay-later firms have confirmed they have seen a rise in interest and usage of their services, particularly in the US, since the onset of the coronavirus pandemic, Reuters reports.

Afterpay, a service based in Australia, told Reuters that it had seen the number of active users from the US more than double, reaching 6.5 million by the fiscal year end June 2020, while its sales in the region saw threefold year-on-year growth throughout Q3 2020. More than half of its US customers are between 25 and 40 years old, the report reveals. A similar company, Affirm, based in San Francisco, also claimed its revenue rose 93% to $509.5 million for the year ending 30^th June 2020.

It is perhaps unsurprising, in such a volatile year for the economy, and with job security uncertain, that consumers are turning to buy-now-pay-later services to help spread the cost of their online purchases. However, data suggests they are becoming increasingly unlikely to meet repayment deadlines.

In a study conducted by Credit Karma for Reuters of 1038 US consumers, almost 40% of those that have spread their payments online have missed more than one payment, and as a result 72% have had their credit score lowered. More notably, 42% of respondents have said they had used a buy-now-pay-later plan before, indicating interest in the service is becoming more and more prevalent among Millennial consumers.

Over 70% of D2C brands have, or will, integrate subscriptions into their ecommerce strategies

Data released in Bold Commerce’s Subscription Trends 2021 report indicates that over 70% of D2C brands have – or will soon – integrate subscriptions into their ecommerce strategies. Furthermore, over half (54%) of respondents claim subscriptions account for 20% or more of their overall sales.

Subscription-based retailing is a proven way to improve loyalty and customer lifetime value – both of which have been badly affected by new shopping behaviours necessitated by the virus. Indeed, fifty-seven percent of brands that have implemented such loyalty programmes have measured their customer lifetime value at a year or more, while just 35% of those without said the same.

Twenty percent of retailers that have so far included discounts as a way of incentivising the purchase of subscriptions have reported month-on-month growth of over 50%. Meanwhile, one-quarter of brands that offer additional benefits as part of a subscription package, such as free shipping or early access to new collections, are seeing the same level of growth compared to 1 in 10 brands that don’t. This suggests brands need to think about more than just discounting if they want consumers to take out a subscription, as other perks appear more influential on overall uptake.

At the moment, industries that are seeing the highest growth (25% or more month-on-month) in subscription services are not all what you might expect. Sporting goods ranked first according to the survey, with 69% of brands in this category citing this level of growth, followed by the Industrial/B2B (60%) and Automotive (57%) sectors. Other up-and-coming industries with modest monthly subscriptions growth of 10% or more include food and beverage, technology and fashion.

More than two-thirds of European consumers have expressed interest in ‘shoppertainment’

Following China’s ecommerce success in this area, more than two-thirds of European consumers have expressed an interest in ‘shoppertainment’ – i.e. online shopping via livestreaming, interactive games and video content – according to a 2021 Forrester and AliExpress report.

Shoppertainment has proven to be beneficial for consumer engagement and sales (particularly impulse buys) and has been accelerated by the boom in online shopping over the past year. Previous research from Forrester forecasted a 45.7% compound annual growth rate in shoppertainment in China alone by 2023, but the pandemic has shifted the goalposts and made it more likely that this will be achieved much sooner.

Now regions in the west have begun experimenting with the idea of shoppertainment, and European consumers are especially excited for the future of this concept, particularly those in the 18-34 age category. Twenty-eight and twenty-seven percent, respectively, believe they will be able to take advantage of cheaper deals and a wider product offering by participating in shoppertainment, although one in five did admit they were concerned about the quality of the products featured in these initiatives.

Electronics, fashion and cosmetics are some of the biggest product categories that consumers are most interested in exploring through shoppertainment, especially through livestreaming. They have also expressed their desire to be able to shop practically and quickly through these sorts of channels, aside from being entertained. Features such as the ability to place orders, get vouchers, see estimated delivery times and read returns policies were the most popular with survey respondents, as was content that was 10 minutes or less in length.

47% of British consumers had issues with parcel delivery between March and October 2020

An October 2020 survey of more than 2000 British consumers, commissioned by Citizens Advice, has found that nearly half (47%) of British consumers have had issues with the delivery of parcels since the first lockdown began in March 2020.

With the UK having been in full or partial lockdown for much of 2020, 51% said they felt more reliant on having products delivered to their homes. The increased numbers of people now shopping online, whether for necessity or convenience, seems to have thrown retailers’ logistical issues into the spotlight.

Of all respondents, a whopping 96% claimed to have ordered products that require parcel delivery since March. Three in 10 of these have experienced shipping delays, making it the biggest issue cited by consumers. A further 18% said they had lost out financially due to a home delivery gone wrong or missing, with 40% of those losing out by more than £20.

As a result, nearly one in four have lost confidence when ordering goods from online stores – something that could have a larger impact as people begin their Christmas shopping.

Citizens Advice has said views of its webpage providing advice on parcel issues had more than doubled to 208,000 between March and October 2020 compared to just 94,000 over the same period in 2019.

Customer Retention Best Practice Guide

US shopping app downloads slowed to a 4% year-on-year growth in Q3 2020 after a Q2 spike

US shopping app downloads slowed to a 4% year-on-year growth in Q3 2020, following a spike in Q2, according to Sensor Tower’s Mobile Retail Trends Analysis, published in Q4.

Across the Apple App Store and Google Play, shopping app downloads in the region surpassed 150 million. The ranking of most downloaded apps remained mostly unchanged throughout Q1-Q3 in 2020, with Amazon, Wish and Walmart remaining in the top three, in that order, as they did in 2019 However, three new retail apps entered among the remaining seven spots, mirroring their successes in the US market in 2020 – Shop (by Shopify) rocketed to fourth place overall, while fashion retailer SHEIN ranked number seven and Nike crept in at number 10.

Sensor Tower data also revealed that US app download growth for top brick-and-mortar retailers between Q1-Q3 2020 was almost double that of top online-only retail apps (+27% vs. +14%). Downloads for stores that also have a brick-and-mortar presence also dropped off less sharply over the Q3 period compared to those of online-only retailers.

This suggests US consumers found a new way to shop with their favourite high street stores in 2020 under unprecedented circumstances. Customers who favour flexible shipping policies and contact-free pickup particularly reaped the benefits of apps from these kinds of retailers.

5. China

Cross-border ecommerce in Singapore booms in year to June 2021

A study released by YouTrip, shared by WARC, has found cross-border ecommerce in Singapore has boomed under the conditions of the Covid-19 pandemic, rising 84% year-on-year in the 12 months to June 2021. Cross-border purchasing is quickly taking a larger share of the ecommerce market in the country, which is expected to reach $8 billion by 2025.

Many of the most popular websites driving heightened amounts of cross-border commerce originate from either China or the US. Taobao took the top spot for the year, with transactions via the site rising by 131%, followed by Amazon at number two. Alibaba placed third (with transactions up 120%), while eBay also made it into the top five (up 98%). June and November/December were reported as peak cross-border shopping periods for Singaporean consumers, reflecting prevalent seasonal sales promotions and events like Prime Day and Singles Day.

According to 8 in 10 consumers in the region, the main reason for shopping with overseas retailers was the lower cost of products compared to those promoted by native retailers. It appears to be a much more pressing reason for shopping in this way, data suggests, than the prolonged closure of international borders. In fact, 9 in 10 plan to continue with their cross-border purchase habits even once overseas travel reopens post-pandemic.

Singaporeans’ demand for bicycles drove the sharpest growth on cross-border websites over the year-long period, as did purchases of various K-Pop merchandise, which saw double and triple the number of sales respectively.

JD.com sees annual active customer accounts rise 27.4% in year ending June 2021

Chinese retail giant JD.com has experienced a 27.4% rise in annual active customer accounts in the year ending June 2021 to almost 532 million, due to an increased appetite for online shopping. These accounts are defined as unique customers that have shopped at least once with JD across the 12-month period, either via online retail or its online marketplace.

In Q2 2021, the company also reported a 26% year-on-year overall rise in net revenue to RMB 253.8 billion (£28.5 billion), beating experts’ predictions. Revenue from its Product segment, which includes JD’s ecommerce arm, rose 23%.

The brand’s popular 618 Grand Promotion, which spans 18 days in June and whose popularity is second only to rival Alibaba’s annual Singles Day event in November, helped accumulate additional online revenue, as well as 32 million new users on its platform during the quarter. Its grocery category drove many of these promotional transactions, with JD Fresh seeing a 70% year-on-year boost in sales within the first hour of the event, while alcohol sales exceeded RMB 200 million (£22.4 million) within the first five minutes.

The maternal and baby, pet, and luxury categories also performed strongly, demonstrating continued momentum across several verticals despite the return to a new normal. However, there were other unspecified categories that JD.com admits had previously ‘peaked during Covid-19’.

China’s emerging night-time shopping habits revealed by JD.com

Big data compiled by one of China’s largest ecommerce players, JD.com, has found emerging night-time shopping habits among Chinese consumers.

Analysis shows online sales conducted from 8pm-11pm local time between May 1^st and July 1^st 2021 grew more than 100% year-on-year, as shoppers increasingly choose their evening hours to browse products online. The trend is largely driven by the healthcare industry, which saw sales of medicine quintuple and sales of fitness equipment triple during throughout this time of day. This suggests home workouts are here to stay for many, despite recent widespread reopening.

Other product categories that saw a spike during these evening hours were alcohol, skincare and beauty and pet services, all of which also experienced a 100% increase in sales versus the same period of 2020. Meanwhile, purchases of digital products out on top by rising 500% year-on-year, with 8pm-11pm accounting for more than half of transactions for this vertical across that take place across a whole day.

According to the data, the over-85s and white-collar workers make up the bulk of consumers shopping online in China during the late evening hours. Typically, these cohorts have higher-than-average disposable income and are ‘playing an active role in the night-time economy’, far more so than students and residents in smaller towns do, JD says.

Cross-border ecommerce in China rose 46.5% in Q1 2021

According to a report published by Wunderman Thompson and JingDaily, ‘Transcendent Retail: APAC’, cross-border ecommerce in China rose 46.5% year-on-year in Q1 2021, reaching an equivalent value of $63.8bn.

The pandemic has spurred on this trend in a number of ways. By December 2020, as many as 70% of China’s population – around 989 million people – were online, the majority via their mobile devices. Nearly 80% of this cohort were shopping online at this time, while 86% were actively using mobile payments. Add to this the restrictions on travel, Chinese consumers and tourists found it more difficult than ever before to make in-person purchases of international goods and have therefore turned to cross-border online retailers to do so.

In an overview, the report explained, “China’s dominance of global ecommerce is no accident. It came about because of a specific set of planned circumstances: the rollout of fast-speed mobile networks even to rural communities, the building of logistics networks including warehousing and delivery; and the near total adoption of mobile payments across China in recent years.”

Pinduoduo’s MAUs increase by 74.6 million quarter-on-quarter in Q3 2020

Chinese ecommerce platform Pinduoduo increased its monthly active users (MAUs) by 74.6 million in Q3 2020 compared to the previous quarter, to a total of 643.4 million. Its number of annual active buyers also rose by 36% to 731.3 million compared to the same period in 2019. At just five years old, this makes Pinduoduo the fastest ecommerce company to have surpassed 700 million active buyers.

Gross merchandise value (GMV) reached a whopping 1.5 trillion yuan (+73%), while its revenue climbed 89% year-on-year to 14.2 billion yuan ($2.1 billion US) as Chinese consumers continued to favour online shopping after its peak of the outbreak in the region. A twenty percentage point decrease in sales and marketing expenses helped to boost this figure further.

This success follows innovative action taken by the company to extend its offering to consumers. In August, Pinduoduo launched its grocery delivery service Duo Duo Maicai to meet growing demand amidst the fallout from the pandemic.

What’s behind the success of China’s social commerce app Pinduoduo?

6. Holiday shopping, Black Friday & Singles Day

US consumers spent a record $204.5 billion online throughout the 2021 holiday shopping period

According to figures released by Adobe as part of its Digital Economy Index, US consumers spent a record $204.5 billion throughout the 2021 holiday season, denoted as 1^st November – 31^st December. This spend represents a rise of 8.6% from the previous year, and was driven by categories including toys (5.4 times more online sales compared to pre-season levels), video games (4.5x), gift cards (3.6x) and books (3x more).

The data also gives an insight into changing shopping habits throughout the holiday season as a whole, as Adobe found that consumers were spreading their shopping out beyond big sales events like Cyber Monday, and beginning to spend earlier. The weeks before Thanksgiving (1^st – 24^th November) were up 19.2% on 2020, while spend during Cyber Week (the five days between Thanksgiving and Cyber Monday) actually fell by 1.4% compared with 2020. Spend then rose again between 30^th November and 31^st December, coming in at 5.6% above 2020 levels.

Adobe noted that the demand for online shopping was not deterred by persistent supply chain issues, even as consumers encountered more than six billion out-of-stock messages online, a 10% increase on 2020 levels and a 253% increase on 2019 levels. The figures also reflect the considerable growth of Buy Now, Pay Later (BNPL) payment options, which saw double-digit growth in 2021: revenue was up 27% year-on-year, while orders were up 10% year-on-year. However, the software giant observed that growth of BNPL options has slowed, “signalling challenges for gaining mass adoption”.

Supply chain delays and winter lockdown fears prompted 45% of UK consumers to start their 2021 Christmas shopping early

Forty-five percent of British consumers planned to get their Christmas shopping done earlier than ever in 2021 thanks to supply chain delays and fresh fears of a winter lockdown as Covid-19 cases remain high. According to data from Braze, shoppers hoped to complete their festive shopping on average one week earlier than they have in prior years.

Thirty-five percent of respondents said their prime reason for starting their shopping sooner is the fear of supply chain issues delaying the delivery of their online purchases, while a further 31% claimed they’re worried about another lockdown being imposed closer to the celebrations. They’re also expecting to spread their spend more evenly across the coming months, with nearly two-fifths stating they will avoid purchasing too much during discount events like Black Friday and Cyber Monday. It is thought that this is partly down to brands offering more consistent discounting throughout the year, which is enticing shoppers to buy more frequently and over a longer period of time.

This more consistent spending pattern indicates that customer loyalty is once again on the rise in the lead up to Christmas – spelling good news for brands that have invested more in customer retention over the pandemic. In September 2021, new customer growth decreased by 14% on the year before, while sessions per user increased by 17%.

2020:

Third party sellers on Amazon saw a 60% growth year-on-year in Black Friday weekend sales

In a blog post on 1^st December, Amazon revealed that sales performance on Black Friday weekend, which includes Cyber Monday, helped the 2020 holiday season become the ‘biggest yet’ for the company.

Black Friday promotions saw third-party sellers grow their sales by 60% year-on-year, surpassing $4.8 billion worldwide. Amazon also claimed that more than 71,000 small and medium sized businesses (SMEs) selling through the marketplace had made more than $100,000 during the holiday season at the time of publication.

UK retailers saw a 23% YoY increase in online store sales on Black Friday 2020

Analysis from Nosto found UK sales in online stores soared 23% on Black Friday 2020. This was accompanied by a 35% rise in online store visits and a 2% increase in conversion rates compared to numbers from the same event in 2019. However, there was a 4% decline in average order value, likely due to heavier discounting than usual to get consumers to part with their cash amid financial uncertainty.

Globally, pet supplies and home and garden came out on top compared to other verticals, seeing a 60% and 52% increase in online sales respectively. The majority of the remaining categories analysed saw growth compared to 2019’s Black Friday results, except for fashion and accessories, which experienced a 4% decline despite a 7% uplift in traffic. This category also saw a 5% decrease in conversion rate and a 3% drop in average order value.

Overall, global online consumer behaviour changed quite significantly over the Black Friday Cyber Monday weekend. In 2020, there was a 24% increase in the number of pages viewed and a 20% increase in the time spent on any one page. Meanwhile, bounce rate dropped by 2%, suggesting that shoppers, more than ever, are making more purposeful and considered purchases during the event.

Interestingly, there was also a 30% uplift in the number of product recommendations shown, indicating that retailers have put in place additional measures to ensure a personalised experience for visitors and a greater chance of conversion and/or upselling.

Ecommerce Best Practice Guide

Alibaba’s 2020 Singles Day sales event broke records

November 11^th 2020 saw Alibaba pull in record sales during one of the largest retail events in China – Singles Day. Purchases made in the 11-day campaign period covering the unofficial holiday topped $74 billion, a new high for the company and a 26% increase on 2019’s event.

In its press release, the ecommerce giant said that more than 470 brands using Alibaba made 100 million yuan in gross merchandise value (GMV) as a result of the shopping festival. The platform also claimed it had processed 583,000 purchases per second during the peak of activity across the campaign. Of the quarter of a million brands that participated, 31,000 originated from outside of the Chinese market. 2,600 of these were joining the event for the first time.

Digital tools came into their own during the Singles Day event in 2020. According to Alibaba’s data, its AI customer chatbot dealt with 2.1 billion questions, and more than 30 livestreaming channels on Taobao Live (Alibaba Group’s livestreaming tool) made over 100 million yuan in GMV.

Rival JD.com made 271 billion yuan (US $40.9 billion) in sales throughout the holiday, while major omnichannel retailer Suning.com exceeded 5 billion yuan (US $­756 million) in omnichannel GMV across its ecommerce platform, Tmall shop, and livestreaming outlets 19 minutes after midnight on November 11^th, the South China Morning Post reported.