While 2021 didn’t bring as many surprises as 2020 did, it certainly was still a year of disruption for the online retail industry. With continued stimulus checks and vaccines rolling out broadly in the U.S., consumer spending levels, both online and in-store, remained elevated. Consumers continued buying in “hot” pandemic categories online, like food and furniture, while also resuming spend in other categories, such as apparel and travel-related products. With continued consumer spending, supply chains became further stretched, causing delays and frequent out-of-stock inventory issues, threatening the 2021 holiday season.

Digital Commerce 360 editors have been covering the online retail industry from all angles by interviewing retailers and analyzing data trends throughout the year. Here are the Digital Commerce 360 staff’s picks of our favorite stories in 2021.

Industry news analysis

• Amazon faces unprecedented perils even as its profit hit new heights
  Amazon accounted for more than 40% of U.S. online retail sales last year, is turning in blockbuster profits every quarter and expanding aggressively into brick-and-mortar retail and home delivery of online orders. What could go wrong? Plenty. Amazon critics given leading roles in the Biden Administration threaten antitrust action that could curb the e-retailer’s growth. 
• The barely bearable burden of online sales tax
  A 2018 U.S. Supreme Court decision is forcing online retailers to collect and remit sales tax to more than 12,000 jurisdictions across the country. With Congress unlikely to provide relief, e-retailers have little choice but to weigh what it costs them to manage compliance internally versus the fees vendors charge to do it for them. 
• Web accessibility lawsuits grow and retailers are the main targets
  More than 66% of Top 500 online retailers were named in an ADA web or app-accessibility cases from 2017 through 2019, according to UsableNet. Of those sued, more than 40% faced more than one lawsuit.

COVID-19 impact

• Will supply chain obstacles stifle holiday sales in 2021?
  The pandemic caused a massive breakdown in the global supply transportation system. It’s changing the way retailers think about their inventories.
• Sending the right message: How retailers let customers skip Mother’s, Father’s Day emails after year of grief
  In an effort to spare consumers who have lost someone or are struggling to conceive a child, an increasing number of merchants are letting consumers temporarily unsubscribe from marketing messages to avoid painful holiday reminders. 
• Demdaco’s sales boom, but 2021’s supply chain issues hamstring growth 
  Online-only giftware merchant Demdaco posts one of its best years last year, with online sales growing 52.8% year over year. But inventory shortages in 2021 are throttling that growth, and the merchant knows it’s leaving money on the table. 

Marketing

• Why there’s value in values marketing
  Consumers increasingly want retailers and brands to use their platforms for good — by committing to sustainability, donating products to worthy causes or pledging to ensure management or products lines represent people of color. As a result, more retailers are communicating their priorities. And some merchants say their efforts are paying off. 
• Marketers pivot holiday messaging strategy with challenging supply chain 
  Shoppers began the hunt for holiday deals earlier in the season, a carryover from pandemic-fueled shipping and inventory woes in 2020. Retailers also prepared in advance, anticipating delays and interruptions. And the clear message to shoppers: buy early or risk going without. 
• Social media influencers with small followings can deliver a big impact
  Systems that identify bloggers by their specialties and location can help brands build cost-effective social media influencer campaigns. The role of influencers in digital marketing could become more important as online retargeting is increasingly restricted by the privacy policies of big tech platforms. 
• Tapping into influencer marketing
  A celebrity endorsement or a recommendation from a respected person can persuade shoppers to pull out their pocketbooks. And merchants can tap into that power with influencer marketing campaigns. However, some online retailers aren’t yet comfortable investing in the marketing channel where results can be hard to measure. 

Customer experience

• Online retailers revamp loyalty programs with data and personalized rewards
  Retailers are modernizing traditional points-based memberships with innovative rewards and tools that entice shoppers to join. And savvy merchants are using the customer data goldmine they get from these plans to inform their marketing strategies and drive revenue.
• The Shopper Speaks: Fortune favors the internet 
  The holiday shopping season favors online retailers, given stock, supply chain and hiring challenges, based on online and store visits from senior consumer insights analyst Lauren Freedman. 
• The Shopper Speaks: Is your customer service in need of a tune-up? 
  19% of online shoppers had a positive story to share while 21% had a negative customer service experience with an online seller over the holidays. This is a wake-up call for online retailers that “getting it right” really does matter.

Retailer spotlights

• Erik’s Bike Shop adds inventory visibility to site amid surging BOPIS sales 
  Erik’s Bike Shop decreased its live chat interactions by 68% and decreased its overall communications per order by 44% after it showcased the nearest store where its products could be picked up on the search results page.
  
• How Rainbow Shops retained its full spectrum of customer data after its platform migration
  The retailer uses SoundCommerce to set up a cloud-based data warehouse. It consolidates order and customer data from its old and new ecommerce platforms.
• Bark’s add-on products for subscriptions drive millions in incremental sales
  Bark drives $32.4 million in incremental revenue by asking shoppers to add additional products to their subscription boxes. About 15% of its subscribers opt for add-on products.
• Accrue Savings puts a twist on alternative payments by promoting savings, not debt
  Fintech start-up Accrue Savings’ save-now, buy-later option is an alternative to buy now, pay later. It may bring retailers new customers and help keep shoppers out of debt. 

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