It’s no secret that the COVID-19 pandemic has changed lives around the world—what people do, who they see, and how they shop. To stay ahead of the curve as a brand, it’s important to understand how ecommerce marketplaces are changing in 2021. With shifting customer behaviors and record growth, the next year promises to be transformative.
What happened during the pandemic? Lockdowns spurred massive ecommerce growth, and the data shows it all. While brick-and-mortar stores closed, a report from McKinsey & Company states that online marketplaces saw the equivalent of ten years’ worth of projected growth in only ninety days, during the first quarter of 2020.
Data from the Adobe Digital Economy Index shows that ecommerce sales in the U.S. shot up 55% by July 2020. Activity slowed slightly in August as consumers reported that they were comfortable returning to in-store shopping when governments eased restrictions and brick-and-mortar stores reopened. But ecommerce activity in August was still up 42% year over year.
On a global scale, data from Statista shows that ecommerce made up 16.1% of total retail sales in 2020, up from 14.1% the previous year. And in 2021 that number has increased to 18.1%. Statista forecasts that this climb is likely to continue, reaching an expected 22% in 2023.
The data is clear—ecommerce growth will continue in 2021 and beyond. And the number of online customers will only continue to rise as more brands take advantage of this growing market.
As a result, the ecommerce marketplace will become more crowded and competitive than ever before—and brands will need to differentiate themselves to attract and retain customers.
In addition, the pandemic has shifted the way people shop, and brands are taking notice. More than ever, customers are preferring to shop online for items they traditionally bought in-store, even though stores are open.
McKinsey states that digital shopping is here to stay. The company projects that the number of customers shopping online for essential items like groceries, household supplies, and personal care products will grow by over 35% after the pandemic. McKinsey even expects categories such as skincare, makeup, apparel, and jewelry and accessories to see online customer growth of over 15%.
Customers also feel more inclined to buy from brands they haven’t bought from before. According to McKinsey, 75% of American consumers tried different brands during the pandemic, and 60% of them plan to continue shopping from these brands after the pandemic. And before trying new brands, the vast majority of customers rely on reviews to make their purchasing decisions. According to research from Northwestern University’s Spiegel Research Center, 95% of online customers read reviews before making a purchase, and displaying reviews can increase conversion by 270%.
It’s easy to see that 2021 is the year for brands to focus on converting first-time online customers into loyal ones. Brands will need to shift their advertising strategies to match these customer behaviors.
Whitebox’s proprietary technology provides marketplace insights across customers and channels that show which ads and marketplaces are moving which products. You can use these insights to better understand your customers, and Whitebox’s marketplace management experts can use these insights to help you optimize your advertising strategy.
Customers want smarter, faster, and cheaper shipping in 2021 and beyond. Since even before the pandemic, customers have become accustomed to the convenience and immediacy of shopping on an ecommerce marketplace. (The Amazon and Walmart marketplaces both have offered expedited shipping for years.) In fact, the National Retail Federation found that 75% of customers expect free shipping, and 65% lookup free shipping thresholds before adding items to their carts.
But while customers expect cheaper shipping, carriers are increasing their fees as online shopping demand grows. According to a report from Jefferies, surcharges that shipping carriers implemented during the 2020 holiday season will likely stay in place as the pandemic continues, on top of the usual annual increases of 5% to 6%.
For example, FedEx announced it would implement a per-package surcharge of thirty cents on Express and domestic residential Ground shipments for customers who shipped more than thirty thousand packages per week in January 2021. The surcharge will remain in place until further notice. This can pose a major problem for small to midsize brands that do not have a robust shipping network.
A fulfillment partner with a robust network can help you deliver products quickly and save costs for both your business and customers. Whitebox offers flexible fulfillment services that provide cost-effective, fast shipping solutions.
With warehouses strategically located to cover 99% of the U.S., Whitebox can place your inventory closer to customers and guarantee two-day shipping. Your products get to your customers faster without allegiance to a specific carrier, saving you money on shipping. Furthermore, Whitebox’s fulfillment technology aggregates data from both the fulfillment and sales sides of your business. With a complete data picture, you gain valuable insights on the performance of your company across verticals and channels, heightening your business intelligence and agility.
Ecommerce brands are under a significant amount of pressure to meet new demands. More customers than ever are shopping online. They’re looking to brands to supply the goods that they used to buy in store. And they’re even buying from brands they never used to buy from.
Reviews continue to be a driving force behind attracting new customers, and shipping costs are rising for brands when customers want faster, cheaper shipping options. It’s more imperative than ever for brands to think outside of the box and to strategize the way forward, with both fulfillment and ecommerce marketplace management in mind. But where to start?
Whitebox’s first-of-its-kind solution leverages omnichannel data, connects to multiple marketplaces, and integrates with a dependable fulfillment network.
Brands use Whitebox’s proprietary technology with its in-house team of marketplace management and fulfillment experts to navigate the ecommerce life cycle and capture opportunities at every stage.