Amazon

eCommerce and DTC Trends in the United States

The COVID-19 pandemic has reshaped the world around us in many ways. For a time, the pandemic diverted consumers away from physical establishments and accelerated the adoption of eCommerce in the process.

During lockdowns, eCommerce companies had a strategic advantage over brick-and-mortar establishments because they quickly adapted to new market conditions. IBM estimates that the pandemic has accelerated the shift from physical stores to eCommerce by approximately five years. The effects are visible on main streets across the US. Once viewed by many as the most appealing way to shop, department stores and malls have been dealt a deadly blow by the coronavirus pandemic as business park retailers and eCommerce brands reap the rewards.

The once-popular department store chain JCPenney declared bankruptcy in May 2020 after heavy losses. The move resulted in the closure of 30 percent of its 846 stores. Similarly, luxury retailer Neiman Marcus also hit the headlines in May 2020 by declaring bankruptcy. However, the chain exited in September 2020 under new ownership. For many of the above department stores, a failure to adopt eCommerce contributed heavily to their demise. 

eCommerce players assert their online dominance during the pandemic

Amazon, in particular, financially benefited from the COVID-19 pandemic. The eCommerce giant delivered a record performance in 2020, with annual revenue up 38% to a staggering $386 billion.

Share of traffic

 

Our data shows that, in the United States, Amazon received 47% of eCommerce traffic when comparing the market share of ten of the biggest eCommerce retailers. Their closest competitor for traffic was eBay, with a 15% share of traffic.

Retailers with brick and mortar stores and an established eCommerce presence also saw website traffic increase during the pandemic. Between July 2020 and June 2021, Walmart saw traffic rise by 26 percent, Home Depot by 35 percent, and Best Buy by 38%. 

Branded search

Amazon maintains a commanding share of branded search in the sector. This is despite a slight reduction in searches in the first half of 2021 compared to the same period a year previously.

Walmart

The eCommerce giant is closely followed by Walmart, which saw branded search demand increase by 23 percent from July 2020 to June 2021. In recent years, Walmart has taken steps to improve its eCommerce presence. The company recently unveiled Walmart+, an Amazon Prime rival that may help explain their recent branded search success.

Home Depot

Pre-pandemic, Home Depot was experiencing significant sales growth thanks to the company’s eCommerce strategy. In 2017, CEO Craig Menear announced One Home Depot, a plan powered by an $11 billion investment to “further unlock a frictionless interconnected shopping experience allowing our customers to seamlessly blend the digital and physical worlds”. The strategy paid off; in their fiscal Q4 2019 performance report, Home Depot revealed that their online sales grew by 20.8 percent. This trend continued throughout the pandemic. For example, in May of this year, the home improvement retailer reported that Q1 sales had increased by 32.1 percent from the first quarter of fiscal 2020.

US website traffic

Etsy

eCommerce retailers with no physical stores also saw website traffic rise during the pandemic. The eCommerce platform Etsy saw a significant boost in website traffic, demand for masks being a major contributor. For example, in April 2020, 12 million masks were sold on their marketplace after Etsy encouraged its community to help supply masks to the public. 

US branded search demand

After performing exceedingly well in 2020, Etsy built on its advantage during the pandemic to accumulate more consumers. Our data revealed that they recorded the best year-on-year growth out of the ten retailers we investigated, with 60 percent growth between July 2020 and June 2021.

US website traffic

 

Traffic amongst the eCommerce brands in the United States grew overall by 29% year on year, highlighting sustained consumer interest to make purchases online despite the easing of restrictions. In the medium to long-term, it appears to be the case that e-commerce will experience a growth trend. 

A Blended Sales Approach: Pet Retail

A good example of a sector that has adopted a successful blended sales approach in the US is pet retail. The COVID-19 pandemic fuelled a pet boom in the United States, as individuals looked for pets to keep them company during the strict stay-at-home orders. The American Pet Products Association (APPA) found that pet ownership had risen from 67% to 70% over the course of the pandemic. A rise in adoptions subsequently led to an increase in demand for pet items which resulted in higher sales for pet retailers. As sales climb, several pet retail brands are pursuing blended sales approaches, which include brick and mortar stores, eCommerce, and DTC models.

Branded search demand

Of the leading US pet retail brands, PetSmart has a commanding share of branded search demand. Their branded search demand dominance can be explained by a variety of factors but will have been reinforced by the introduction of curbside pick up from their brick and mortar stores and their home delivery services via their website.

pet retail

Similarly, Chewy, an online-only pet care line acquired by PetSmart in 2017, is also experiencing significant growth. The brand saw sales grow during the pandemic, and their Q1 2021 results show that their net sales of $2.14 billion grew 31.7 percent year over year.

Our data reveals that site visits to the top pet retail brands have witnessed overall growth across the board. However, Chewy is taking a commanding share of site traffic in the last 12 months (57%) increasing traffic to its domain by 40.4% between July 2020 and July 2021. Chewy’s rise to site traffic dominance in just a few short years is a testament to the sales power of DTC retail in the United States.

Search demand is beginning to stabilize as restrictions ease

Despite the volatility witnessed in search behavior and the growth recorded by most brands, demand appears to be retracing back to pre-COVID levels as restrictions ease. Website traffic data ranging from July 2019 to June 2021 reveals that, for most UK brands, the pandemic spike that occurred in April and May of 2020 is less pronounced than the November 2019 Black Friday spike in traffic. This indicates that a post-COVID permanent boost to eCommerce is not inevitable in all markets.

Similarly, branded search data reveals that US brands are approaching or are now slightly below July 2019 levels. The growth levels for the first half of 2021 demonstrate sustained growth. However, Q3 data will better indicate how eCommerce brands are maintaining growth from the pandemic. 

US branded search

 

Has the pandemic truly changed our shopping habits?

In the United States, there is a question whether the pandemic-inspired boost to eCommerce will continue post-pandemic. For a time, the pandemic dramatically altered the way many of us buy goods. COVID-19 restrictions limited access to some brick and mortar establishments, and many turned to eCommerce and DTC retail. However, as restrictions ease, website traffic and branded search demand appear to be retracing pre-COVID levels. Some brands, such as Amazon and Etsy, have fared exceptionally well in revenue, website traffic, and search demand. Website traffic and branded search data from the third quarter of 2021 will allow us to shed some more light on how the pandemic has changed our shopping habits over a year and a half after the pandemic began.

This article features multi-source, triangulated data insights generated by onefourzero’s expert consultants. To learn more about how we can assist your business by providing data with commercial value please click here.