When compared to how it looked little over a year ago, the e-commerce world today is nearly unrecognisable. As a result of the pandemic, online retail has risen to prominence and has become a requirement for many businesses. In February 2020, online retail sales as a percentage of overall retail sales were around 19 percent. It had soared to close to 35 percent a year later.
Many changes have occurred as a result of the rise of e-commerce, the majority of which are taking place behind the scenes. This post highlights a few of the major changes I’ve witnessed, as well as the lessons we may draw from them.
Disruptions in the Supply Chain
It wouldn’t be fair to analyse e-last commerce’s year without also discussing the retail market. Traditional retail has been under severe pressure for years, and the shift to e-commerce is nothing new. There was always talk before the pandemic about how merchants needed to offer in-store experiences to stem the tide. Many consumers, on the other hand, are adamant: they want choice and ease. And it is here that e-commerce shines.
While brick-and-mortar stores were forced to close due to global lockdowns, buyers began buying trampolines and bakeware, while internet retailers were busier than ever. Traditional retail was taking a breather, while e-commerce was accelerating. I can’t tell you how many times I’ve heard individuals say that during the lockdown, their previously dubious parents or grandparents were forced to utilise Amazon for vital purchases and now get parcels every other day. This is perhaps more detrimental to established retailers than shop closures.
As April revenues rose past even the previous Christmas period, there is no better term to characterise the uptick in full sell-outs on Amazon than the 2020 watchword, “unprecedented.” However, no component of the supply chain was prepared for such a rush in orders, and brands began to run out of stock and production capacity. The reality is that, while many companies have seen significant Amazon growth in the last year, I feel that few have realised their full potential due to supply chain issues.
Supply chains are just now beginning to recover a year later, giving businesses the opportunity to fulfil their full potential and match March and April 2020 sales.
However, supply chain teams have had a difficult time in 2021. Container prices skyrocketed as a result of shipping shortages from Asia to Europe, not to mention the infamous Suez Canal blockade. What was once $700 per container has now risen to $9,000 per container. Consumers must bear with price hikes in order for brands to recover.
These supply chain interruptions should have taught brands a vital lesson. It is not glitzy content production or advertising that drives sales in a period of high e-commerce demand. The logistics and inventory teams, on the other hand, are the true heroes, ensuring that the brand is able to benefit on the surge in demand. It’s critical for those in charge of a brand’s marketing campaigns should involve in the account’s operational performance, or organisations risk spending a lot of money and missing out on a lot of chances.
The massive amount of money being spent at companies that focus on fulfilment by Amazon (FBA) enterprises has been one of the most exciting phenomena to emerge over the last year. Thrasio popularised the concept, but practically every week since then, another business has replicated it, with relative ease getting 8-figure sums to begin making acquisitions.
But it’s not as easy as gathering funds and trying to profit from Amazon’s success. Even for specialists, the Amazon platform can be perplexing, but it’s even more so for individuals who are unfamiliar with its subtleties. Thrasio’s success is due in part to their investment in expert teams capable of growing the firms they acquire. Meanwhile, their rivals are rushing to assemble teams that aren’t nearly ready.
Countless businesses have tried to cash in on e-meteoric commerce’s rise, but they risk fast becoming obsolete unless they develop a thorough understanding of platforms like Amazon.
E-Commerce in the Future
In 2021, e-commerce shows no signs of slowing down: Amazon’s last earnings call revealed yet another record-breaking quarter, with revenue exceeding $1 billion for the second quarter in a row.
However, brands face stiff competition from both newly reopened brick-and-mortar stores and the myriad other businesses who migrated to the internet to keep afloat during the pandemic. To separate out from the throng, e-commerce managers must already be anticipating the next big trend. This ever-changing profession might be difficult to master, but they will reward those that put in the effort to become true specialists.