ChannelSight Intelligence: The eCommerce Landscape in 2021

Unboxing online retail insights is part of ChannelSight’s DNA. Our technology enables brands to achieve a detailed understanding of their customers’ shopping behaviour, which they can use to guide tactical and strategic eCommerce decisions.

Our data also provides us with an insight into wider online retail trends, benchmarks for various categories, and helps us to identify predictions for the world of eCommerce, which we’ll explore in this report.

eCommerce acceleration in 2020

In 2020, the world was turned upside down by the COVID-19 pandemic, and the impact was particularly profound in the retail industry. With countries quickly instituting widespread lockdowns in order to stem the transmission of the virus, retail was forced to move online.

These regional lockdowns generated spikes at various points in the year, but overall eCommerce has also grown by around 30% YoY.

The pandemic has not only increased eCommerce familiarity but has massively increased digital adoption amongst older demographics. As we move into 2021, we can see that target audiences have increased across the board, and brands now have a much wider user-group online than ever before. Despite this, knowing how to attract these new user-groups is no easier.

Key trend: Conversion rate has increased by 70%+ YoY, traffic has not shot-up exponentially, but intent has.

What can you do? Throw away the rule book on hypothetical user-personas and demographics, focus more on purchase intent in your marketing funnel than age, gender, affinity.

Winning categories

It’s no surprise that eCommerce as a whole has seen such profound growth over the last year, but which categories are claiming the biggest wins?

Consumer Electronics was already a mature online vertical, and as a result whilst its conversion efficiency improved (particularly with users shifting to the ‘work-from-home’ set-up) verticals that saw the strongest growth were those that had historically benefited from an ‘in-store’ experience.

White Goods and Home Appliances were the key winners in this regard, with people now much more accustomed to spending extended hours indoors, the quality of their home-apparatus was top of mind.

In Consumer Packaged Goods, spikes were much more directly associated to ‘high-street’ lockdowns, with basket sizes increasing significantly as users stocked-up. Whilst this behaviour is expected to continue, with consumer confidence believed to take several years to return to a sense of normality, predicting growth in CPG eCommerce will be more reactive to market forces.

Key trend: Categories with historically problematic shapes/sizes for home delivery, saw triple digit growth in sales.

What can you do? Basket-size has increased significantly, with user purchase behaviour becoming more unpredictable based on their household needs rather than their individual needs. Brand partnerships with related household items will become more important for brand visibility.

Online retail KPIs by vertical

VerticalConversion Rate (%)YoY Conversion Rate GrowthYoY Basket Qty GrowthYoY Online Revenue Growth
White Goods2.3%0.9% pts339%316%
Small Domestic Appliances3.3%1.6% pts201%209%
Consumer Packaged Goods5.5%3.7% pts33%111%
Consumer Electronics5.8%1.7% pts40%52%
YoY:2020 vs 2019

Device and channel performance

The new eCommerce landscape has accelerated growth in some devices and channels more than others. Digging into the data shows that preference for certain devices varies by vertical and basket size, and some channels are experiencing stronger growth than others, with this also depending on category.

Device performance

In CPG where average order value is low, we already see mobile taking over desktop browsing. In contrast, in consumer electronics and household appliances, desktop is clearly predominant with regards to sales conversions. Furthermore, due to screen-size and security concerns, older users in particularly prefer to use desktop for high-value orders.

Key trend: Replenishment vs Lead-Item is a key component of device targeting, as users become more accustomed to ‘stocking-up’ on mobile.

What can you do? Understanding your product portfolio based on transaction device. Replenishment goods, accessories and CPG items are now much more likely to be purchased on mobile. Your premium products in particular are more likely to be purchased on desktop so adjust your campaign targeting accordingly.

Basket quantity by device

Conversion rate by device

Consumer Electronics8.4%4.1%5.7%
Consumer Packaged Goods11.3%4.0%6.8%
Small Domestic Appliances4.4%2.3%3.0%
White Goods3.0%1.5%1.8%

Average order value by device

Consumer Electronics€68€54€64
Consumer Packaged Goods€29€23€26
Small Domestic Appliances€238€232€245
White Goods€425€282€383

Channel performance data

With the physical store closed, the virtual store has taken on increased importance. Of the four key channels we measured last year, search and brand-website generated the strongest transaction intent, as users looked to replace their in-store purchasing habits with the digital world. Brand site saw strongest growth within the consumer electronics and consumer packaged goods categories, with increases of 6.4% and 10.2% YoY growth respectively.

What became more relevant than ever is the role of consideration and engagement in the patch to purchase, with users looking to validate their purchase with user-generated content, and impartial accreditations within the product content. This has seen Amazon and other marketplace retailers start to introduce editorial (reviews) content into its search listings.

Key trend: Trusted editorial and reviews have increased in importance, as impartial product feedback has a more tangible role in conversions due to less social interactions.

What can you do? Ensure you have user-generated content displayed on your brand-sites, describe key criteria and search facets that are relevant to the user, e.g. energy efficiency, charger type, side-effects, warranty – anything that can recreate the trust generated by seeing the product it in person.

Online retail KPIs by vertical (Conversion rate %)

VerticalBrand SiteDisplay AdvertisingSearchSocial Media
Consumer Electronics5.9%2.5%2.7%3.4%
Consumer Packaged Goods10.2%1.4%4.2%1.2%
Small Domestic Appliances3.4%
White Goods2.4%0.3%

Online retail KPIs by vertical (Average Order Value)

VerticalBrand SiteDisplay AdvertisingSearchSocial Media
Consumer Electronics€62€35€24€38
Consumer Packaged Goods€29€18€13€15
Small Domestic Appliances€237
White Goods€385€253

Role of retail partners

The impact of the pandemic has seen a more empathetic and dependent view on final-mile fulfilment than  ever  before, with street claps and tipping for your local delivery driver becoming commonplace. The true revolution in eCommerce is a shift in the perception of fulfilment costs from a burden on gross profit to a necessity to differentiate yourself. As a result, the flexibility of fulfilment offered by your own delivery network or a third-party has become equally influential as the payment methods you offer, and your price- strategy. Thus, direct to consumer brands struggled, pure-players succeeded and retailers that offered users something a bit different gained market-share.

Whilst Amazon and its Prime subscriptions went through the roof, we saw retailers with slightly ‘nicer’ fulfilment options win sales away from Amazon by offering services such as:

  • Deliver to 5th floor.
  • Unpack, Install and remove your old appliance.
  • Try for 30-days and we’ll replace/pick-up free of charge.

Peace of mind basically helped newer demographics de-risk purchasing decisions, and in many scenarios the retailer’s fulfilment capabilities determined these successes.

Key trend: Marketplaces saw a >10% increase in conversion rate, however flexibility of pick-up and fulfilment saw supermarkets take market share.

What can you do? While pure players will continue to drive volume on lower value items and basket building, retailers with a more consumer centric approach (particularly fulfilment) will continue to attract new consumers, so ensure you have listings in both areas.

Online retail KPIs By retailer/marketplace (North America)

Retail RankingRetailers / MarketplacesConversion Rate (%)YoY Conversion Rate Growth
1AmazonUS26.6%14.7% pts
2AmazonCA17.3%3.5% pts
3WalmartUS3.7%1.5% pts
4TargetUS5.0%3.3% pts
5HomeDepot4.4%1.8% pts

Online retail KPIs By retailer/marketplace (Western Europe)

Retail RankingRetailers / MarketplacesConversion Rate (%)YoY Conversion Rate Growth
1AmazonDE12.3%7.9% pts
2OttoDE9.5%6.4% pts
3AmazonUK12.3%7.1% pts
4MediamarktDE1.2%0.6% pts
5AmazonFR11.7%3.3% pts

Looking forward

Whilst 2020 was a year of enormous growth for eCommerce, the shares of non-brand sales in total online retail transactions went up from 35% to 41%. As online retail grows, so does competition, distraction, and predictability. New user-groups, purchasing habits and fulfilment methods have been unearthed.

Therefore, we believe it’s essential to factor in the competition to your budgeting and eCommerce strategy, with key focuses on the following areas.

  • On-site merchandising, branding and search optimisation.
  • Choose retailers for volume, but don’t forget convenience.
  • Consider product categories where in-store experience was vital and focus your efforts on building content there.

About ChannelSight

ChannelSight’s ‘Where to Buy’ solution enables brands, publishers and broadcasters to transform the customer  experience and generate new revenue streams from all digital channels. The advanced performance insights that ChannelSight offers, empowers marketers with the data to understand which channels and retailers are having the highest impact on the bottom line.

Brands use ChannelSight’s technology to make all digital content ‘shoppable’, capturing consumer engagement across all channels, devices and platforms, and offering easy options to purchase products with a couple of clicks.

ChannelSight can also provide brands with visibility of the prices, inventory levels, product descriptions and images of their products currently being sold on retailer websites. This makes it easy to achieve consistency and compliance of content across the digital shelf. Book a demo with us to find out how we can help your brand!