Ecommerce Was By Far the Biggest Retail Trend of 2020

It was a wild year for U.S. retail, from panic buying and toilet paper shortages to QSR chicken sandwich wars and bankruptcies aplenty, including storied brands like Brooks Brothers and Neiman Marcus, as well as mall staples like JCPenney and J.Crew. However, for retail's biggest players, Amazon and Walmart, 2020 was an excellent year. Online grocery and curbside pickup started to go mainstream—although Amazon struggled (albeit briefly) to adjust to the abrupt shift in consumer demand early in the year. Amazon also faced warehouse worker walkouts and fallout when internal comments about fired employee Chris Smalls went public. Other 2020 Amazon highlights include the launch of a Counterfeit Crimes Unit to help root out knockoffs and the filing of select lawsuits against bad actors. This was also the year Amazon opened its first Fresh grocery store with smart shopping carts; the ecommerce giant also launched prescription delivery and a hand-scanning payment option. CEO Jeff Bezos made his Congressional debut, and Prime Day became a fall event intended to kick off an earlier-than-ever-before holiday season. Meanwhile, Walmart debuted its membership program, Walmart+, to mixed reviews and partnered with ecommerce platform Shopify to grow its own third-party marketplace and TikTok to test the waters of social commerce. The retailer also hosted drive-in movies, virtual summer camp and socially distant trick-or-treating for quarantining families. And, even though it feels like a lifetime ago, 2020 was also the year Walmart aired its first in-game Super Bowl commercial. But retail in 2020 was much more than just Amazon, Walmart and bankruptcy filings. We asked analysts for their takes on the year’s biggest trends—here’s what stood out to them in a very unconventional year for the retail industry: ‘The winner of 2020’ The most prominent trend is—without a doubt—explosive growth in digital commerce. Media company GroupM’s first-ever ecommerce forecast noted a “new plateau for newly accelerated future growth.” Jeff Malmad, executive director and lead at Shop+, a unit focused on retail and ecommerce at media agency Mindshare, pointed to internal research that found 62% of Gen X and 44% of Boomers are shopping online more now than before the pandemic. Similarly, Greg Mercer, CEO of Amazon seller platform Jungle Scout, pointed to data that shows 34% of consumers spent more online in Q3 even as their overall spending dropped. And—no surprises here—he called Amazon the clear winner as 70% of consumers surveyed shopped there in Q3 versus 35% on Walmart.com and 26% on Target.com. Per Audrey Low, managing director of international accounts at Mindshare China, the shift toward ecommerce, as well as other preexisting trends like curbside pickup and syncing up in-store stock with retailer websites, is here to stay. “Rather than acting as a change agent for brands’ long-term strategies, Covid-19 served as an accelerant, ensuring that three-year business growth and transition plans were actioned in just six months,” she said. The shift to omnichannel continues Another 2020 trend was retailers pivoting to omnichannel retail. We saw an example of this in October when Walmart announced its new test stores, which are intended to serve as real-life experiments for new technology as it seeks to transform its 4,800-store footprint into brick-and-mortar stores that double as online fulfillment centers. “A lot of brands and a lot of retailers turned some of the local stores they had into mini distribution centers [in 2020], which puts them in a better position for 2021 than they were going to be otherwise,” Matt Moorut, principal analyst at research firm Gartner said. “From the retail perspective, the functionality to actually be able to deliver this … wasn't necessarily in the roadmap coming in.” Loyalty is up for grabs Another 2020 development: shifting loyalties. Data from consulting firm McKinsey shows 36% of consumers tried a new brand during the pandemic, and 73% plan to incorporate those brands into their new routines. This was partially due to availability during product shortages, but also points to a distinction between loyalty and habit—and why customer data, including contextual data, is so valuable to brands. That’s also why some big-name brands launched their own DTC sites this year, and why retailers like Walgreens revamped their loyalty programs to better compete. According to one executive who asked not to be named because he is not authorized to speak on the record, the availability of services like contactless payments and curbside delivery started to influence consumer loyalty in 2020. “I don't think once everybody's vaccinated that that's going to change a whole lot,” he said. “Retailers are going to have to offer really creative pickup options [in order to retain loyalty].” Brand content helps navigate the new normal With so many consumers stuck at home and looking for things to do, 2020 was also the year of branded content. Per Malmad, consumers have been looking for more content and purpose from retailers and brands. “Not just promotional messaging, but inspiration on how to use what you have and make the best of the new normal,” he said. “We’ve seen brands put forward programs or messaging around different holidays in particular to help people update their holiday traditions in light of the pandemic.” Brendan Moorcroft, svp and head of solutions and services at digital marketing agency iCrossing, agreed, noting parent company Hearst saw “a pretty big change in behavior” in content consumption when shelter-in-place orders were instituted. “There was the host of changes in behaviors, like … people were starting to recreate cocktails that they weren't able to go out to [and] getting back to basics [like how] to cook at home,” he said. “And so they were looking for guidance on how to do that and then buying the products that followed. Then there was more of a comfort food phase. All of those habits and behaviors were very different than when restaurants and stores were open completely.”