Despite the economic downturn and a record percentage of unemployed Americans, retail sales projections continued to increase during Q4. According to Mastercard, retail sales grew 3% year over year. Though experts still aren’t sure exactly why sales overall increased with all the extenuating circumstances, the numbers are still shocking. They also reported that retail sales alone grew 49% from 2019 within 75 days. On top of this, department stores and apparel brands took a plunge in sales, falling 10.2% y2y. Even though Mastercard is a reputable source, they are only one card company with only one set of statistics. Though the numbers are not entirely in for all Q4, plenty happened in the online retail space to report. Here is what happened in December 2020.
- ShopRunner Acquired by FedEx
ShopRunner, an e-commerce platform that offers subscribers 2-day delivery for $79 a year, is looking to bolster its offerings. It is suspected to restart its third-party fulfillment in 2021. The President and COO of FedEx stated, “The acquisition, once closed, aligns with our continued efforts to create an open, collaborative eCommerce ecosystem that helps merchants deliver seamless experiences for their customers.” FedEx hopes that ShopRunner’s data-driven and omnichannel enablement will combine with their global digital data and logistic intelligence to make them a powerhouse in the e-commerce market. Analysts believe that this move by FedEx is to boost its e-commerce value proposition. Though its main competitor, Amazon, has the lion’s share of the market, ShopRunner and FedEx’s combination allows consumers to purchase internationally with FedEx’s logistical power. We are looking forward to seeing how this acquisition will affect the future of e-commerce and small parcel shipping. Only time will tell!
- Small Businesses who pivoted to e-commerce had unprecedented growth
Big box retailers had to ramp up their e-commerce capabilities to meet demands in 2020, but what about small businesses with zero e-commerce efforts? Well, the numbers are in, and they are trending towards e-commerce savvy business owners. One-quarter of small businesses closed their doors during the pandemic. With companies such as Etsy, Amazon, and Shopify, which allow small businesses to set up an online sales platform quickly, these platforms helped small businesses keep their doors open. According to Adobe Analytics, small retailers have seen an average of 110 percent growth during the holiday season. Considering that Etsy specifically caters to small businesses, the 108% growth of Etsy is a great representation of small business e-commerce growth. Small business owners have commented that their sales aren’t as big as they would be if the doors were open. Still, they are thankful for the opportunity to continue to sell during the holidays (the most significant shopping quarter of the year).
- eCommerce projected to be a quarter of global retail by 2024
The numbers are in, and guess what? E-commerce sales are not slowing down anytime soon. Global retail e-commerce will amount to $3.9 trillion. Media buying giant GroupM projects that e-commerce spending will grow by low-double-digit percentages through the next six years, even after the end of social distancing. Group M anticipates that e-commerce spending will rise to $7 trillion by 2024 and then reach $10 trillion globally by the end of 2027. Forrester Research’s principal analyst Jay Pattisall states, “after a year of sitting at home, a lot of our behaviors are going to be permanently oriented toward these direct- and digital-commerce behaviors.” Even with the pandemics ending insight, brands are investing more money in online infrastructure and marketing. Are these companies following consumer trends, or are they trying to predict consumer behavior before it’s happened? Since we cannot say when this pandemic will end, the best companies can do is to continue with current numbers.
December marks the end of a fiscal and calendar year. Coming into January is the time to reflect and project where your company will go next. December is a make-it-or-break-it month for many online retailers and companies alike. Though all the numbers are not in, we can be confident that December showed massive growth year over year in the online space. We are looking forward to learning more and growing with these new consumer trends. How is your business pivoting?