E-Commerce in the USA - Industry Report - Talkwalker
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Industry Report E-Commerce in the USA E-commerce is changing: how should brands adapt across industries? Report Title | Sub-Slogan 1
Contents
03 04
Introduction and Overarching conversations
executive summary: around e-commerce
The solution is digital
07 13
Industry trends Local insights
16 17
Key takeaways Next steps
19
Methodology
2
Introduction and
executive summary
Each online transaction is a
step closer to a new normal
The COVID-19 crisis has changed how people purchase products in their day-to-day lives. With businesses turning to
digital solutions and customers increasingly engaging in online experiences. As a result, the e-commerce industry has
grown at a much faster pace in 2020 than we could have imagined.
At a time where even the smallest of interactions between brands and consumers are happening online, it is key for
companies to sift through large amounts of data and find the crucial conversations that will drive their strategies
forward. Through social listening, a brand can understand their landscape, and define or tweak their strategy based on
the voice of their consumers.
In this report we will explore the growing e-commerce industry, focusing on the impact of the coronavirus crisis, and
subsequent trends that have become prominent in the months leading to the end-of-year holiday season.
The pandemic has heightened the importance of electronic commerce for every kind of product or service, and now
everyone wants in. Many companies are now entering the industry by launching their own online shopping sites or
through partnerships with existing players.
As people remain cautious about in-person shopping, brands have begun changing the traditional sales season, both
in terms of calendar dates and the relevance of digital discounts. This will create a long-term change in the end-of-
year sales around the world.
Following the shortage of essential products that occurred across the globe in March, the difficulties around deliveries
and product scarcity are sure to reappear during this period of increased shopping, which will be a test for the
adaptability of brands.
Regardless of how much longer the current situation lasts, we can expect long-term changes to the industry, and
the overall way products are sold around the world.
3
Overarching conversations
around e-commerce
Buying online has become the new trend
In 2019, online shopping accounted for one third of brands’ total sales. This year however, this number is expected to
grow to 50% of total sales, showing a growth spurt in the market driven by the impact of the COVID-19 crisis.
Using Quick Search, we have seen a significant growth in
conversations around e-commerce over the last 13 months.
In parallel, as quarantine was adopted around the world, we also saw online conversations about the industry
grow rapidly, and they have not yet lost momentum, as online shopping has become part of the routine of many
new consumers.
Going through the
online shopping list
With the growing volume of conversations linked to
e-commerce in 2020, we used Conversation Clusters
around the industry’s top brands to gather the most
relevant global insights for all players. We wanted to
have a bird’s-eye view of the accelerated growth of the
market as well as the upcoming holiday season.
4
Conversation Clusters helps us visualize the main themes for the
e-commerce industry as well as their connectivity.
E-commerce’s evolution and popularity spurt
• Digital transformation movement & technology impact (8.6%)
• Need for electric vehicles in fleets of e-commerce brands (3.7%)
• E-commerce how tos & tutorials (4.4%)
As the e-commerce model grows in popularity, established companies are accelerating their digital transformation
initiatives. The trend is also affecting upcoming brands, which have recently been asking how to best transition (some
of) their activities online as they explore new sales channels and potential partnerships.
Given the importance of logistics and the connectivity between e-commerce and the shipping
industry, we are seeing big players take an interest in electric vehicles, as an efficient and
environmentally-friendly solution for product delivery in the long-term.
5
Challenges ahead
• E-commerce brands hiring to meet pandemic-fueled online demand (15.5%)
• Impact of panic buying on e-commerce (13.6%)
• Xbox One X/S / PS5 pre-orders cancellations (6.6%)
“The accelerated consumer shift toward digital is here to stay,” according to Nike’s CEO, John Donahoe in a recent
interview. Yet, this new reality comes with its challenges.
Many of the adversities relate to the extended effect of the global pandemic, which is pushing e-commerce brands’
supply chains to their limits, affecting production speed and supply. This led to a wave of panic buying at stores in
March, which seems to have returned in different markets, affecting supply of products through online sales.
To succeed with their sales strategies, many industry giants such as Amazon, Walmart and Flipkart have started to ramp
up on personnel, as they expect more orders through the end of the year.
Holiday seasons & promotions
• Flipkart Big Billion Days sales (17.9%)
• Promotion of craft items sold on Etsy (15.6%)
• Promotion of fall items launched on e-commerce platforms (6.5%)
As the end of the year approaches, brands are starting to release their end-of-year discounts and promotions.
According to Deloitte, e-commerce sales are expected to explode this holiday season, and many brands are interested
in making the most of the season through both traditional sales dates and new online shopping events.
6
Industry Trends
Everyone wants in
As we settle into Q4 2020, it’s evident that e-commerce companies have
been able to take advantage of the global situation. As more and more
brands look for alternatives to make up for reduced in-store sales, the online
shopping industry is becoming the ideal solution.
PepsiCo’s successful bet on e-commerce
For some, the solution has been to switch their strategy completely, and enter the market
by launching their own online store. This is the case of PepsiCo, which developed a strategy
early in the year based on two important insights:
• Online sales were becoming crucial for brands
• Snacks were trending due to a change in consumer behavior
The brand launched two direct-to-consumer sites in May. According to its latest quarterly earnings it’s managed to
leverage this new channel, along with the snack trend, to achieve a 5% increase in sales.
Looking at our Top Results we can find where the launch of Pepsi’s DTC sites was featured.
With the launch of Snacks.com and PantryShop.com, Pepsi has not only increased its revenue, it’s generated a lot of
online conversations. We analyzed the emotions linked to the brand’s online shopping sites and found that PepsiCo is
already seen by consumers as a growing and committed player in the e-commerce industry.
“The penetration of
e-commerce or e-grocery just
accelerated by three years.
It’s happening now.”
Ramon Laguarda,
PepsiCo, CEO
This word cloud allows us to see the top 25 adjectives Marketing Week
linked to Pepsi’s e-commerce sites.
7
Bed Bath & Beyond finds online success with a younger crowd
During quarterly earnings season, we got to see which companies managed to pivot their strategies to respond to
these changing times. After six consecutive quarters of losses, one of 2020’s winners is Bed Bath & Beyond, with a
comeback profit of $218M.
BBB was able to flip its strategy in April through a heavy e-commerce investment. This not only increased online sales
by 89%, but also brought 2M new customers (most of them TikTok savvy) to its aisles.
Positive emotions felt towards Bed Bath & Beyond are driven by a rejuvenated crowd.
As shown on our word cloud, BBB has been getting a lot of positive attention from their new, young consumers. To keep
these customers happy, B-cubed has quickly shifted to an online-centered approach. First, it decided to convert 25%
of its stores into online fulfillment centers, and then announced the launch of same-day shipping by partnering with
grocery delivery companies Shipt and Instacart. With this, Bed Bath & Beyond is prepared for an active holiday season.
Changing the traditional sales season
This end-of-year is going to be different from any other before, with the global fall shopping season (Black Friday, Cyber
Monday, Singles’ Day, Diwali, Christmas, etc.) lasting much longer than previous years. The responsibility for reshaping
these traditional dates lies with e-commerce.
An early start to the sales season
Given the strength of online shopping this year, Attentive’s latest report for this sales season shows how 56% of
respondents from retail and e-commerce brands plan to start their holiday sales earlier.
8
Do you plan to start your holiday season sales earlier this
year than in past years?
A big driver to push sales periods in the United States has
been Amazon, with the decision to hold its renowned
Prime Day on October 13th-14th, after cancelling the
usual dates in July. As a response, large retailers such as
Walmart, Target, and Best Buy decided to jump on the
early holiday sales train and also announced their own
sales in October.
This graph from Attentive shows how brands are planning
ahead for the sales season.
With sentiment analysis we managed to find the 10 brands leading the
holiday season conversation, including Amazon, Walmart, Best Buy, and
Target, and the increasing positive sentiment around them.
Conversations around the holiday season are being heavily influenced by the brands’ new events such as Walmart’s
Big Save Event, Target Deal Days, and Best Buy’s early Black Friday. The growing positivity around the top 10 companies
leading the conversations shows how consumers are enjoying the new sales dates.
9
From sales days to sales weeks
The early start of the shopping season is not the only change we’re seeing on the horizon. As various governments and
consumers prefer to maintain certain social distancing measures, retailers are using their online sales channels as their
main point of contact with consumers.
In North America, many shops have abandoned the tradition of Black Friday as we know it, deciding to close their
stores at Thanksgiving, and extending the overall sales period to reduce an excess of people in store.
An additional change to the traditional season in the US is the push for further discounts and promotions to occur
online. This can be evidenced below, with conversations around e-commerce and the holiday season peaking in mid-
October, and specific mentions around discounts taking much of the volume.
Using filters on our graphs helps us easily identify what is driving the conversation
around a specific topic, and here we find discounts dominate online chatter.
10Difficulties around deliveries and product scarcity
In March, many countries were unprepared for the large demand for essential products, which led to shortages. As we
move into an intense end-of-year, with many product launches, good deals, and caution around a potential new-wave
of COVID, it’s possible to see a strain in global delivery systems and scarcity of certain items.
Too many pre-orders to handle
Having found a variety of activities to entertain ourselves at home during the past few months, overall interest for
gaming has grown, as it proved to be a great way to interact with others. The growth in gaming can be seen
through the 25% increase in conversations since last year. Added to that, when Xbox and PlayStation announced their
new consoles would be launched in November, with pre-orders available in September, the conversations on both
brands spiked.
With Quick Search we can see the trend of one or more topics
over a span of up to 13 months back.
Unfortunately, pre-orders for the upcoming PlayStation 5 exceeded the total supply available and Sony, the company
that owns the gaming console, had to begin cancelling certain pre-orders.
Virality Maps give us a visualization into the successful expansion of a result. Here we
can see the quick expansion of PlayStation’s post across various countries.
The company acted quickly on social media and issued an apology, promising more consoles by
the end of the year. The tweet got over 200K engagements in many major markets. PlayStation
hopes that the PS5 becomes one of the most successful e-commerce products of 2020.
11Only one per basket please
Product scarcity is returning to some markets during this fourth quarter of 2020, as people’s anxiety
increases with regard to the global situation, and they begin to buy more products than they need.
The wave of panic buying in different countries is affecting e-commerce for essential goods.
When the news around a potential second wave of COVID-19 arrived in the UK, people began shopping for
extra items, which led many stores to impose a limit on the number of essential items each person could buy.
As a result, many customers have started to buy online, but stores are now imposing limits on their e-commerce sites as
well. As seen below, panic buying, coronavirus, and the potential of another lockdown are leading negative conversations.
Sentiment analysis across themes (in this case hashtags) allows us to see what drives
conversations as well as the type of emotion people show towards each of these themes.
What can brands interested in e-commerce take away from these findings? Given the current pandemic,
e-commerce is seen by many as a recourse to traditional shopping. Social listening allows for the early identification
of these scarcity trends, as depicted below, which can give companies crucial information to push the right offers and
better adjust inventory.
We found that groceries are the product that
is most related to product scarcity when we
filtered the results by category.
12Local insights
USA
Three installments of Black Friday
A holiday shopping season as never before seen. Companies are seen trying to balance traditions with innovation,
and Walmart is trying to maximize sales through this holiday season by breaking down its promotions into three
different events.
By using a combination of our maps and filters, we can compare the share of
voice of various categories across states.
What’s all the buzz about? Our analysis on online conversations around e-commerce and holiday shopping in the
US shows ‘Electronic & Media’ as the trendiest category around the country. To respond to this, Walmart has already
announced that its three events will each have distinct technology discounts amongst other categories.
We expect that Walmart’s extension of Black Friday through online sales will not only continue in years to come, but will
also make other players launch online sales.
Mexico
E-commerce can come before physical stores
Using a new instruction manual. IKEA, the Swedish home
and furniture giant, has arrived in Mexico, but there’s a
catch. The brand, known for its large stores with labyrinth-
like aisles, has had a slowdown in sales due to COVID-19. For
this reason, the company is shifting its strategy to push for its
e-commerce channel first, opening its online store in Mexico.
The first physical store for IKEA will not be open in the country
until 2021, but the entrance through e-commerce could allow
the brand to create a good customer-base to hit the ground
running once their space in Mexico City opens.
13With this virality map we were able to see how the launch of IKEA’s online
shopping site was picked up by different news outlets
Word travels fast. IKEA’s online launch announcement was picked up by a number of local news outlets, and received
praise by many customers. The article by Forbes Mexico received 14.2K engagements and was reshared through all
types of media channels.
The country’s solid interest in IKEA’s online presence shows how consumers are shifting their preference to digital sales.
This trend has been growing in Mexico for the past few years, according to Pierre-Claude Blaise, General Director of the
Mexican Online Sales Association (AMVO):
“E-commerce in Mexico has had a double-digit growth rate in the last
few years. Given the complex global situation, many companies and
businesses have had to accelerate their digital transformation, which
has generated an exponential growth in the industry.
The sales season that typically occurs at the end of the year has been
slowly adding online sales channels each year. These e-commerce
events are supporting the growth and development of thousands of
businesses as well as PYMES.”
United Kingdom
Morrisons expands into online partnerships
More accessible. Morrisons, the supermarket giant, announced in August that it was partnering with Amazon. As
customers in the UK move to online channels for most of their purchases, Morrisons is adapting to offer an easier way
for them to buy their groceries.
The alliance is said to be beneficial for both parties. For Morrisons, it offers additional buyers, and a new channel with
pre-existing clients. For Amazon, it showcases the benefits of Amazon Prime, an essential instrument at a moment where
the country has growing concerns about a lockdown and online shopping is deemed as the safe choice.
14Including sentiment analysis in our word clouds allows for an additional
layer of depth. This helps us understand not only what themes dominate the
conversation, but also if it’s under a positive or negative light.
The ramp-up. To cover for the expected surge in demand coming from Amazon Prime, especially with same-day
deliveries, Morrisons has added 1,000 jobs around 50 UK stores. Our word cloud above highlights the main themes
around this Morrisons-Amazon collaboration, which includes quality, wider variety, online service, and jobs as focal
points.
15Summary
E-commerce is growing faster this year than ever before as a result of the global
pandemic. The industry has become a solution for many companies to continue
operating, and for many consumers to continue buying the products they want
and need. The growing number of brands entering the market will change the
way that we buy in the long-term. For businesses to succeed, it’s important to
adopt digital transformation and create an online presence so consumers enjoy
their buying experience.
Key takeaways
• With e-commerce here to stay, we can expect most of the sales events in the
future to include a hybrid model of physical and online stores, or move to online
channels completely.
• For e-commerce success, brands must innovate to stay ahead of growing
competition. To find this innovation, they will have to monitor customer
conversations around what is missing in the industry, and what the competition is
doing.
• Given the changes in buying behavior, e-commerce platforms will need to ensure
appropriate logistics for on-time deliveries, as well as enough inventory to respond
to rapidly changing demand patterns.
• Companies should track online conversations to have an accurate grasp of what
is being said about the brand and react accordingly to maintain brand health.
• Brands that see 2020 as an outlier, and refuse to participate in online commerce in
any way will struggle in the future.
Want to make the most of these key points?
We can show you some ways to adopt these into your strategy for 2021.
16Next steps
Regardless of whether you are new to e-commerce, or established in the industry,
here are a few ways in which social listening will help you take your business to
the next level.
Measure your performance through business impact metrics
By having one source of truth you will be able to make better business decisions.
Correlating business KPIs with social data metrics allows for immediate analysis of
your online campaigns.
One way you can use business impact metrics is by analyzing the relationship
between the amount spent on a PR campaign and the social mentions around
your brand. As you can see below, the amount spent on this 3-day campaign
generated a response by the audience, but it died down as soon as the
campaign ended.
Analyzing budget spent on PR alongside social media mentions is
an effective way to measure the results of your campaign
Analyzing the conversations around your company will help you find patterns
between your social media presence and critical metrics such as sales. In the
example below it is possible to see how peaks and troughs in mentions generally
relate to ups and downs in the number of items sold.
Comparing social mentions and
sales in one graph is a great way to
find connections between them.
17Use dashboards to find what customers will want next
Tracking conversations in social media is one of the best ways to be up-to-date
with changing consumer behavior. Social listening allows you to understand
growing consumer needs, identify pains, and provide a better service. Integrating
this type of tool can also allow you to innovate based on what you find in online
conversations.
For example, by tracking customers in the United States, we saw an upward
trend on the “Buy now, pay later” model. The latest brand to make a move into
this payment option was PayPal, introducing its “Pay in 4” model which allows
consumers to pay in four interest-free installments.
Creating a dashboard like the one below is one way to easily track these
conversations based on real-time data.
Dashboards are the best way to get an updated snapshot of your industry and
understand what is happening around trends, competition and consumers.
18Methodology
Insights for this report were taken from Talkwalker Analytics and Talkwalker Quick
Search for the 13 months prior to October 20, 2020. However, given the nature of
the topic and its growing importance in the last few months, we put emphasis on
data between the months of August to October, 2020.
Mentions of topics were gathered from a variety of sources including news sites,
social media channels, forums, and blogs.
Sentiment analysis, video analytics & image recognition are powered by the
Talkwalker AI Engine.
Sentiment analysis is performed with an average of 90% accuracy, with the ability
to detect sarcasm and ironic comments.
Images are compared to a database of over 30,000 brand logos, to help identify
brands
in social media photos and videos.
Queries were used to identify the topics discussed such as e-commerce, major
end-of-year sales, and top brands in the e-commerce industry. In some cases,
these may have been improved using Boolean operators, to help remove false
positives. Filters were used in order to narrow down results for specific places or
categories.
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