Whether your store has been around for decades or you’re closing off your first holiday season selling online, one thing’s for sure — the current holiday market is unlike anything you’ve seen before.
Not only is e-commerce growth finally slowing down from the initial Covid boost, but consumer buying behavior is shifting rapidly to cope with supply chain problems — the likes of which we’ve never seen before.
E-commerce giants like Amazon and Shopify missed their Q3 targets despite achieving 46% year-on-year growth. Shoppers also took to the streets earlier than usual, with 61% of those surveyed by the National Retail Foundation saying they had already started buying gifts and 28% actually completing their holiday purchases when asked in November 2021.
So, you’re probably wondering:
“What are some lessons we can take from this one-of-a-kind holiday season? And how can it shape our strategy going forward?”
We’re glad you asked. In this post, we’ll dive into the key takeaways from 2021’s rocky holiday e-commerce performance. We’ll also share some tips and tricks to help you adjust to the road ahead.
Did supply chain problems take you by surprise? Get the right working capital and stay ready with your inventory.
How did you feel leaving this e-commerce holiday season? Relieved? Excited? Anxious?
If you’re thinking all of the above, welcome to the club. These are common emotions felt by e-commerce entrepreneurs in busy seasons like Q4.
Only, this year the final quarter looked and felt completely different.
Let’s take a look at some reasons why 2021’s e-commerce holiday season stood out from the rest.
Despite being nearly two years into the pandemic, problems created by COVID-19 are still causing significant challenges for e-commerce stores.
From battling for manufacturing space to items sitting at ports for months as overwhelmed customs offices struggle to process goods — the pandemic has hit the global supply chain from end to end. And it all came to a head this holiday season.
Political moves like Brexit and massive workforce trends like “The Great Resignation” have not only led to shortages in staff and land transportation but have also created a steep rise in labor and material costs.
For example, truck drivers in the UK are commanding high rates for their services with some scooping a 40% pay rise.
These costs add up and brands are left with the tough decision to either soak up the extra charges and lose margin, or pass on the costs to customers and potentially lose sales.
You don’t have to look far to notice how chaotic shipping times have impacted the availability of goods.
Even giant supermarkets have had to find creative ways to mask their bare shelves. The soaring shipping costs have meant brands with deep pockets get first dibs on the limited space — for a premium, of course.
Clearly, it’s been a rocky year. But despite navigating uncharted territories, you’ve made it through to the other side. Nice work! 🎉
To ensure your next e-commerce holiday season is a huge success, it’s important to learn lessons from the past and create a plan to dodge any future potholes in the road.
Let’s explore some of the key shifts and learnings from this Q4, plus tips to get and stay ahead next year.
One exciting change e-commerce businesses have experienced during 2021’s Q4 is shoppers are buying more online.
However, consumers are opting to buy goods before key holidays like Black Friday and Cyber Monday, even choosing to forgo the infamous discounts if it means they can get their products on time.
These changes in purchase times give e-commerce businesses the chance to scale faster instead of waiting for key holidays. Shoppers spent a jaw-dropping $109.8 billion from November 1st to 29th. More specifically, Black Friday sales fell by 1.3% from $9 billion in 2020 to $8.9 billion in 2021.
Gone are the days when shoppers bought only from desktops.
Modern shoppers shop on the go. Device optimization has a direct impact on customer satisfaction and we’ve seen device shopping diversification increase even more during the holidays in 2021.
Of the $109 billion sales secured from November 1st to 29th, $63 billion were pulled in from desktops and other devices while $46 billion came from mobile.
The desktop conversion rate even hit 6.4% and 3.4% on mobile on November 29th.
Supply chain issues have rocked inventory availability and faced with frustrating stockouts, some shoppers have taken matters into their own hands by taking their product hunts in-store.
If they don’t get inventory on track, e-commerce sellers could lose out on sales to their brick-and-mortar competitors. In fact, nearly 47% of US consumers intended to shop in-store this holiday season, an 8% jump from the winter holidays in 2020. Not only that, 65% of consumers wanted to shop in-store to reclaim the old-school benefits of brick-and-mortar shopping like being able to view, touch, and experience products before buying.
For example, out-of-stock messages rose by 250% compared to pre-pandemic figures and 325% compared to the holiday period in 2019.
In October 2021, shoppers got over 2 billion out-of-stock messages. Not only that, product catalog size for retailers over Cyber Week dropped 6% in the US and 5% globally compared to last year.
Needless to say, shoppers are rightfully skeptical of the supply chain and the ability of their favorite stores to have the products they want when they want them.
The e-commerce holiday season was anything but easy last year — but it still offers brands the chance to increase their customer base, explode sales, and kickstart new growth levels.
But to secure these perks, you’ll need to put your thinking cap on.
Anticipate problems in key areas like raw material sourcing, production, shipping, warehousing, and delivery. Create a robust plan to tackle each potential risk so you can go into the next holiday season confident about how you’ll stay in stock, wow your shoppers, and grow your sales.
Taking a proactive approach to increasing your holiday e-commerce sales will mean getting out of your comfort zone and facing challenging scenarios head-on. But the payoff will be huge. As your competitors battle stockouts, delays, and the customer complaints that come with them — you can wave their customers over to your store and continue growing your business.
Your best year yet awaits. Get ready for success with SellersFunding.
