eCommerce Year in Review: 2021

If you’re an eCommerce seller, then you know online sales have exploded in recent years. Due to the pandemic, more people shopped from home than ever before in 2020. But did this trend continue throughout 2021?

In this article, we’ll take a look back at eCommerce trends, challenges, statistics, and more from the past 12 months. Keep reading to discover your eCommerce year in review for 2021. 

Sales remained strong

As many eCommerce companies know, online sales in 2020 hit record highs. While eCommerce growth wasn’t quite as exponential in 2021, the industry is still going strong. 

Data from Statistica estimates that eCommerce sales in the U.S. amounted to approximately $469.2 billion in 2021, up from $431.6 billion the previous year. With these sales, however, also came a few challenges. 

Supply chain challenges were rampant

Among the biggest challenges for brands this past year were supply chain issues. Sellers, vendors, manufacturers, and shipping carriers alike all had difficulty keeping up with unprecedented consumer demand. 

Much like 2020, 2021 saw merchandise shortages, shipping delays, and difficulty getting and keeping enough workers on hand across the eCommerce industry. These problems also resulted in massive price inflations. In fact, the U.S. Bureau of Labor Statistics says product prices in 2021 rose at their fastest rate since 1982. 

Along with the reasons already mentioned, these price hikes were also caused by the increased cost of importing goods, as ocean freight rates on merchandise shipped from China to the U.S. increased five times in 2021. Port closures, typhoons, workforce shortages, lack of containers, bottlenecks, and more all contributed to this rate jump. 

Marketplaces dominated

This was a big year for online marketplaces according to data compiled by Marketplace Pulse. In 2021, shoppers bought more from Amazon than they did from Walmart stores. These kinds of developments mark a major shift in brick-and-mortar retail sales vs. eCommerce sales, as consumer appetite and shopping habits continue to swing toward online shopping.

In 2021, Amazon sellers sold approximately $390 billion worth of merchandise. Amazon retail sales (items sold directly by Amazon) reached $220 billion, which means sales on Amazon totaled $610 billion. It has also been reported that Amazon accounted for over 40% of eCommerce sales overall.

Meanwhile, Walmart reported global eCommerce sales of $75 billion in 2021. Finally, Shopify is now 45% the size of Amazon (compared to 25% in 2018).  

Forbes also reports that in 2021, investors continued putting money into aggregators (firms that purchase smaller companies that sell on Amazon). According to U.K. consultancy firm, Hahnbeck, 80 aggregators have raised more than $11.5 billion in funding.

What these firms do is use their funding to help small brands in the digital commerce space grow more quickly.

AR, AI, and tech are leading the way

When it comes to keeping today’s shoppers happy, technology is leading the way. 

Augmented reality (AR), artificial intelligence (AI), and other innovations enable online sellers to provide a unique, end-to-end customer experience

For example, chatbots serve as a virtual assistant to online shoppers, popping up and answering their questions or helping them find what they need. Sellers are also using more intuitive forms of data such as AI to collect information about customer behavior in order to offer a more personalized shopping experience. 

Another growingly popular tool is voice search. Loop Ventures estimates that 75% of U.S. homes will contain smart speakers by 2025. This growth is leading to more customers than ever using voice search to order food, buy groceries, and shop online. 

Today’s customers expect more

From more ways to pay (such as Apple Pay), to a preference for eCommerce companies that take social responsibility rather than just pursuing profit, today’s consumers expect more from brands.

They’re also willing to pay for it. Studies on shopping habits have shown that millennial customers will pay higher prices for products from brands that are sustainable, eco-friendly, and/or offer a better customer experience. Data also reveals that customer service and customer experience have now become more important to shoppers that product or even price.

New forms of commerce are on the rise

In keeping with the convergence of technology, online shopping, and rising customer expectations, several new forms of commerce are also on the rise. 

Livestream shopping, also known as live commerce, is being incorporated by all of the major marketplaces. For example, Amazon and Walmart are know to host livestream videos during big shopping events and holiday sales, such as Black Friday or Cyber Monday. 

Social commerce (online selling via social media channels) is growing more popular as well. Platforms such as Instagram and TikTok have changed the way brands advertise their online wares, and influencer marketing provides a way for companies to get their offerings seen by tons of potential shoppers. 

Finally, quick commerce is the trend of providing delivery as quickly as possible. It used to be a big deal to offer one- or two-day delivery, but now many sellers (such as online grocery providers) can have items at your door in 30 minutes or less.

In 2021, online commerce and the vast majority of consumer trends were still clearly driven by the pandemic. According to data such as Google analytics and reviews of shopping habits, many of the most popular products included: 

  • Comfort and fitness apparel.
  • Board games.
  • Arts and crafts supplies.
  • Groceries.
  • Pet food and supplies.
  • Toilet paper and household goods.
  • Consumer electronics.
  • Accessories for consumer electronics (phone cases, laptop cases, etc.). 

Speaking of Google, it’s now even easier to remember what products you’re interested in buying. Thanks to the new “Your carts” section on the Google homepage, you can see any items you’ve added to your shopping cart on various websites and marketplaces.

Lastly, as we already mentioned, heavy product demands in 2021 presented inventory and supply chain challenges for brands. This resulted in another trend of online sellers repeatedly losing the “buy box” to third-party sellers when they were unable to stock new items quickly enough. On Amazon, third-party sellers’ share of worldwide unit sales reached 56% in 2021. 

eCommerce 2021 Year in Review: Final Thoughts

This past year was another huge year for anyone in the digital commerce space. While we may not have seen the record-breaking growth rate from 2020, sales still remained strong in 2021.

Online marketplaces continued to overtake brick-and-mortar stores, as shoppers found it easier than ever to buy everything they needed virtually. That said, as in 2020, we also saw supply chain issues and other challenges in 2021. 

Finally, thanks to continual innovations in technology and ways to collect customer data, sellers have a myriad of tools at their disposal to grow their eCommerce brands throughout 2022 and beyond.

Need help getting your online business off the ground?

Whether you’re at the “I have a new business idea” stage, the “why isn’t my business growing?” stage, or anywhere in between, we’ve got your back. 

With our worry-free formation (especially for starting an e-commerce LLC), compliance, and financial services, we’ll handle your paperwork for you and walk you through every step of the way. Reach out to us today! 

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