One week closer to Black Friday 2020, and we’re seeing retailers shift strategies to deliver excellent online experiences that may well end with curbside pickup. Expect to see a range of online deals, incentives, time limits, and available stock from October all the way into December.
But just as brands are about to execute their holiday strategies, we learned this week that the United States’ trade deficit has grown to $63.56B during the pandemic. Considering the world is in the deepest recession in history, trade wars and supply chain breakdowns are rocking retail in nearly every country.
Looking at how the pandemic has impacted brands, a report from Euler Hermes forecasts that brands still have challenges to face in Q4 and beyond. Carrying into 2021, the toll on retail may result in a record number of insolvencies, with the United States, Brazil, the United Kingdom, and China getting hit the hardest. The next few months will bear watching.
Welcome to the weekly Insights commerce roundup where we track how brands are adapting to changes in consumer shopping and spending around the world. Here are some of the top e-commerce trends we’ve spotted over the past seven days.
For Economic Recovery, Europe Needs to Treat COVID-19 as a War
As we go further into the pandemic, economic recovery is foremost on the world’s mind. In the last week, the European Research and Innovation Days conference (bringing together scientists, entrepreneurs, and policy makers) has called for “a level of sustained support, of investment, on a wartime footing.”
In addition to economic stimulus, Europe needs to re-evaluate what economic success means. Conference attendees say success in this new world needs to include climate change, gender and racial inequality, lack of food and water, health care, housing, and political representation.
Stephanie Kelton, a professor of economics at Stony Brook University in the US, supports a shift away from measuring economic success as it relates to GDP. “We need to replace fiscal targets with climate targets, with social targets — we need a real rethink here.”
Economic professor at University College London, Mariana Mazzucato draws comparisons to the post-WWII economic recovery. “We have a very large recovery fund, and for the first time in a long time, that fund is conditional on the member states actually investing, having a plan around climate, digitalization and health,” she said. “It’s no longer about cutting deficits — this time it’s about: ‘Where’s your plan?’ And I think this is a really important moment.”
Amazon and Target Prepare to Go Head-to-Head in Mid-October
No sooner had Amazon officially announced that their annual Prime Day sales event would take place on October 13th than Target announced their own Deal Days would start the same day.
Target’s promising they’ll have “nearly 1 million more deals” than the previous year, but they also hope this online event will let customers know “they don’t need to wait or face the crowds to get the best deals, all with no membership fees required.” Target plans to make most online deals available for curbside pickup or same-day shipping.
The e-commerce extravaganza may revive interest in Target’s free loyalty program Target Circle, and by extending Black Friday deals throughout November, Target’s offering price-matching and “weeklong discounts and digital deals every day.”
Not to be left out, Walmart has declared its own “Big Save” online event from October 11th to 15th where consumers can take advantage of Black Friday-like savings on thousands of items, including electronics, toys, beauty items, and more.
Moves like these from the biggest retailers in the US will likely ripple through the entire holiday season as other brands adapt. Best Buy, Macy’s, and Home Depot all plan to kick off Black Friday sales earlier this year too.
But no one should feel sorry for Amazon. eMarketer predicts the company will hit $9.91 billion in global sales this holiday season, up 43% from last year’s Prime Day. Prime membership is also expected to grow just under 15% which will be the first time Amazon Prime can say they have more than 50% of the US population in their loyalty program.
Two Brands Leverage AI to Understand Customers’ New Normal
McDonald’s has had an app for three years, but it’s only recently that the global brand has started to really leverage their customer data and feed that to the mobile app, which is one of the most personalized ways a brand as large as McDonald’s can engage customers.
Now that McDonald’s has had time to integrate their tech acquisition of Dynamic Yield, the brand offers an AI-driven app serving up personalized deals to customers based on their past preferences.
The issue is doing this at scale. McDonald’s has stores in 38,000 locations in more than 100 countries. That’s great for data collection, which AI will use to drive personalization, but it’s also a massive logistics challenge, serving around 68 million customers a day.
In a Wired magazine interview, McDonald’s CEO Steve Easterbrook can see the shift to online shopping accelerating. “How do you transition from mass marketing to mass personalization?” he wondered. “To do that, you’ve really got to unlock the data within that ecosystem in a way that’s useful to a customer.”
As we’ve seen since May, home office and improvement products have been some of the biggest sellers. Furniture brand Room & Board launched an AI-driven system which itself greatly expanded Room & Board’s ability to personalize. Like McDonald’s, any customer-centric brand knows there are great rewards when you get personalization right. As a result, Room & Board’s conversion rates are up 80%.
Data Insights for the Week
This week seven countries are in the global top ten for pure e-commerce revenue growth. In retail e-commerce, the Americas are on top with Europe, and three countries are over 200% YoY revenue growth this week, Argentina, Ecuador, and Puerto Rico.
Revenue Increase Leaders at a Glance
With six countries under 0% in revenue growth, pure players in Europe made modest gains over the last two weeks putting them somewhere between the Americas and APAC. For revenue growth in retail e-commerce, Europe is close to the Americas, both with countries that have over 100% YoY growth and each with five countries in the global top ten.
Revenue Increase Leaders at a Glance
In pure e-commerce revenue growth, Thailand is #3 in the world, but most countries are below 0% YoY. Retail online is even worse, with only two countries (Australia and New Zealand) above 0% YoY.
Revenue Increase Leaders at a Glance
Top Product Trends of This Week
Key Product Trend Insights: Up 1,325% in YoY uplift, consumers bought ice scrapers this week, preparing for winter in the Northern Hemisphere. The two accelerating products, dog beds and basketball hoops, both have more moderate increases in uplift.
Growth Rate of Online Transactions
Overall, the Americas have the best year-over-year revenue growth this week, particularly in pure e-commerce. In retail e-commerce, the top European countries are close to the Americas, but many countries in APAC declined over the last two weeks in both pure and retail e-commerce.
Trends by Region
Pure e-commerce: The Americas dominate pure play this week with seven countries in the global top ten (and most of those are in the top half of the list), though Europe has made steady gains in revenue growth to finish just below the Americas. However, APAC continues to decline, falling under 0% YoY.
Retail online: APAC had been leading the world in revenue growth, but starting September 23rd, the region fell, ending the week just above the Americas, which has been on a similar trajectory over the last two weeks. Europe’s overall revenue growth has been lower than the other two regions, but along with the Americas, Europe has five countries in the global top ten (for the first time since the pandemic began, no APAC countries are in the global top ten).
Trends by Country
The top two countries in the Americas (and the world), Argentina and Puerto Rico (both have over 200% YoY revenue growth) have led pure players in the region for the last 18 weeks. The rest of the region is racking up growth, and despite many countries’ rates falling, none of the countries we track in the Americas are below 0% this week.
In the last two weeks, the Dominican Republic rose 30% (+199.19% YoY, #2 global), Brazil fell 66% (+131% YoY, #4 global), Jamaica stayed steady, falling only 1% (+95% YoY, #5 global), Chile fell 74% (+87% YoY, #6 global), Mexico fell 12% (+68% YoY, #10 global), and Canada rose the most in the region with 41% (+48% YoY).
At the bottom (but still seeing YoY revenue growth) are Peru down 11% (+48% YoY), United States down 2% (+40% YoY), and Colombia down 60% in the last 14 days (+19% YoY).
Revenue growth in pure e-commerce in Europe ends the week in moderately good shape. Most countries declined in the last two weeks, yet only six countries are under 0% YoY.
Over the last 14 days, Belarus fell 11% (+74% YoY, #8 global), France gained 13% (+72% YoY, #9 global), Sweden’s up 4% (+68% YoY), Bulgaria’s up 18% (+62% YoY), Switzerland rose 17% (+26% YoY), the UK fell only 0.04% (+25% YoY), and Germany declined 9% (+22% YoY).
The biggest pure-play risers in the last two weeks are Croatia up 28% (+40% YoY), Slovakia up a stunning 82% (+67% YoY), and with the largest increase in revenue growth for Europe, Slovenia rose 88% (+59% YoY).
In APAC, most countries had incremental revenue gains in the last two weeks, but there is a great disparity between the top country in the region Thailand (down 30%, +168% YoY, #3 global) and the second best in APAC Australia (up 6%, +78% YoY, #7 global). From there the divide is more severe, with only three other countries above 0%: Japan up 2% for +14% YoY, Vietnam up 24% for +13% YoY, and the Philippines with the biggest gain in the region, up 31% for +4% YoY.
Despite most countries in the Americas falling in revenue growth over the last two weeks, everyone except Brazil is over 48% YoY. For the last 18 weeks, Ecuador has led with over 200% growth YoY and is #1 in the world. The next three countries are all over 100% growth with Peru down 6% (+134% YoY, #3 global), Mexico down a steep 72% (+114% YoY, #6 global), and Colombia up 28% (+112% YoY, #7 global).
Rounding out retail e-commerce revenue growth in the region, Chile finished the period with +89% YoY (#10 global), the United States fell 12% (+60% YoY), Canada rose 3% (+48% YoY), and Brazil dropped 15% to finish at -57% YoY.
Year-over-year revenue growth for European retail e-commerce is good this week, with only eight countries under 0%. On top is Belgium down 6% in the last two weeks to finish at +184% YoY and #2 in the world. In the same time, the UK rose 14% (+128% YoY, #4 global), Poland dipped 22% (+125% YoY, #5 global), Spain rose an impressive 59% (+106% YoY, #8 global), Croatia rose 83% (+95% YoY, #9 global), and the Czech Republic climbed 87% to end with +91% YoY.
Other countries in the region with positive revenue growth in the last two weeks are Austria up 14% for +55% YoY, Switzerland up 19% for +43% YoY, Greece up 19% for +38% YoY, Hungary up 11% for +37% YoY, and Germany up 13% for +36% YoY.
Revenue growth in APAC retail e-commerce has had a tough two weeks, with only two countries above 0% YoY and none in the global top ten. Australia fell 5% to end at +85% YoY, and New Zealand (nearly 50% below Australia) fell 15% to end at +39% YoY. The next country Thailand dropped 33% to end at -0.4% YoY and 39% below New Zealand.
Out of the remaining countries, only two posted revenue growth in the last two weeks: Japan up 7% (-6% YoY) and Vietnam up 18% (-10% YoY). At the bottom are India (-38% YoY) and China down 24% (-40% YoY).
This article originally appeared by our friends at Emarsys.