Overall online sales in Europe were up 55% in May compared to May 2020, a time when the grave depths of the pandemic were becoming evident. The continued increase in ecommerce, seen in Signify’s Ecommerce Pulse data, might come as a slight surprise, given the assumption that pent-up demand would send consumers rushing back to physical stores.

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Less prominently on display is the rest of the story — the fact that an ecommerce boom unlike any in the history of retail continues to contribute to retail’s rise.

Online spending figures for May show ecommerce spending in the U.S. continues its torrid pace, with monthly sales closing 151% higher than they were a year ago, according to Signifyd Ecommerce Pulse data. And yes, there is a hint of the Roaring `20s in the numbers.

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It was a year when regular online customers devoted more of their time and dollars to online purchases. Newbies poured into ecommerce storefronts. Direct-to-consumer became more than just a niche activity. Here was opportunity, amidst the chaos.

Signifyd’s recently released State of Commerce Report 2021: Redefining Experiences for a New Wave of Customers,” concluded that although it’s too early to say for sure whether these consumer habits are here to stay, retailers should study the ecommerce data trends and use them to plan moves that will carry them successfully into the new, post-COVID-19 world. Here are six trends in particular that CMOs should keep their eyes on:

1. Devote marketing attention—and spend—to ecommerce

Ecommerce, once just a small slice of retail revenue, now adds up to as much as 30% of it. This trend is only expected to accelerate in the next 12 months. The pandemic sped up the expected transition from physical to online sales by as much as five years. The implications for CMOs and other marketing leaders are tremendous. You’ve suddenly become much more important. Your job now: strategizing on how to best optimize revenue flowing in through online channels, and how to make sure the customer experience remains stellar—and your NPS high—when you don’t see your customer face to face.

2. Rapidly convert store operations to accommodate buy-online-pick-up-in-store and curbside pickup

During early phases of the lockdown, non-essential retailers had no choice. They weren’t allowed to let shoppers into their stores. So curbside pickup became a necessity. Today more than two-fifths of omnichannel retailers offer curbside pickup. (Before COVID-19 hit, it was less than 7%, according to Digital Commerce 360.)

Marketing leaders are obviously involved in such a massive shift in ecommerce trends. Marketing campaigns and promotions have to be designed around knowing which stores have which items in stock in which geographic areas. They have to be sensitive to regional or even local preferences to ensure that the right products are sent to the right stores. And they have to contemplate ways in which to encourage the sort of impulse buys that happen in-store all the time, but are hard to envision with curbside pickup.

These in-demand fulfillment channels aren’t necessarily an easy strategy to embrace, because the logistics are difficult. Plus, these kinds of  operations offer many opportunities to be exploited by fraudsters. Still, Best Buy, after closing all its physical stores, converted them to curbside pickup and delivery fulfillment centers within 48 hours, CNN reported. That’s quite a feat and quite a pandemic success story.

3. Focus on experience excellence for online newbies

The pandemic did offer some benefits. Large numbers of new customers clicked their way into online storefronts without retailers having to spend anything to acquire them. The challenge became turning them into loyal customers with high lifetime value. This meant focusing on the customer experience. Are you investing in recommendations engines to cross-sell and upsell your new customers? Have you updated your store search and checkout experience so that they’re easy to navigate?

Interestingly, these new online consumers behaved differently from those who came before them. As a group, they had larger basket sizes than those who had been serious online shoppers for a couple of years, spending more than their 2019 peers by about 163%. They were also the most enthusiastic buy-online-pick-up-in-store (BOPIS) and curbside shoppers.

But as with all new customers, retailers have to work hard to deliver the right kind of experience to get these consumers to come back. They are in that super-sensitive, first-impression territory. For example, products need to be dispatched on time and curbside orders had better be ready when promised. First impressions mean a lot, especially when you need to attract and retain customers solely through digital channels.

4. Reach out to customers directly

Direct-to-consumer (DTC) brands were already going strong, pre-COVID-19. The pandemic only strengthened the appeal of this ecommerce trend and caused many brands to consider it as a viable channel.

As a marketer, you need to be aware that a DTC retailer controls its own supply chains, has access to valuable consumer data, and is able to build closer relationships with the shoppers who are buying directly from it. These are all good things, especially the fact that you own the customer relationship—and all the massive amounts of data that comes from it. For marketers, this is a treasure trove for future strategic planning as well as personalization of marketing outreach campaigns.

Iconic brands like Pepsi, Harley-Davidson, Levi’s, Revlon, and Shiseido realized that, and jumped into the DTC business. However, selling directly proved challenging to brands used to selling through established channels, especially when it came to fraud. Many brands had little experience with fraud protection and little historical data to determine who among their customers were legitimate shoppers and who were fraudsters. This led to more losses and revenue shrinkage than these retailers were accustomed to writing off.

5. Stop refusing legitimate orders

Retailers who had little to no experience with online sales prior to COVID-19, faced a dilemma. Card not present (CNP) fraud is riskier for merchants than taking a credit card from a shopper in your physical store. When a consumer uses a credit card to buy online, the retailer is liable for fraud losses. In-store, of course, fraudulent charges are the banks’ responsibility.

Increases in online orders are inevitably accompanied by increases in fraud. When COVID-19 arrived in full force in March 2020, fraud rings were right behind them, knowing that traditional fraud teams were likely working from home and stretched thin. Signifyd updates its Fraud Pressure Index weekly to determine how much online fraud is occurring at specific points in time. That index broke all records during the pandemic. By the end of May 2020, fraudulent activity rose more than 320% compared to pre-pandemic levels. Although these levels continued to fluctuate for several months, in the early holiday shopping season, they reached heights more than six times pre-pandemic levels.

Unfortunately, some new—and even experienced—online retailers saw these trends and shrank back. They became more conservative about which CNP orders they would take. This unfortunately put a damper on revenues, as a lot of legitimate orders were refused. Retailers need to take a more balanced view of fraud and find ways to mitigate losses without turning away potentially valuable customers.  This impacts CMOs directly because too-stringent anti-fraud measures can reduce your click-throughs and conversations, and definitely inhibit bottom-line sales. So it makes sense, if your marketing numbers are inexplicably disappointing, to check on your fraud detection policies.

6. Don’t skimp on marketing non-traditional online wares to consumers

Finally, Signifyd found that items that hadn’t traditionally been big online sellers — such as groceries and furniture – began to fly off the digital shelves during the pandemic. This ecommerce trend hasn’t ceased in 2021.

It’s a sign that consumers may be more flexible about what they buy online in the future. Home furniture demand skyrocketed, and sales of home goods and decorative items rose 141% over 2019 numbers. There was also an extraordinary nearly sevenfold year-over-year increase in the online sales of media, toys, hobby items, and games. Orders for musical instruments escalated. Sales of electronics, sporting goods, gym equipment, and, toward the end of the year, major home appliances, were also off the scale as consumers seemed to have lost their hesitancy to buy online for even unconventional, big-ticket items.

What’s the message for marketers here? Don’t come to hasty conclusions about what consumers will or won’t buy online. Necessity, after all, is the mother of invention, which is why so many unconventional items suddenly became acceptable online purchases when they couldn’t be obtained any other way. But now that consumers have tested the waters for such items, and presumably found them convenient and safe, there’s no telling what they won’t buy if sufficiently enticed in the right way by the right messages.

Freelance writer Alice LaPlante contributed to this report. Photo by Getty Images

We can help you plan for where ecommerce is headed.

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While ecommerce spending has been dramatically higher than pre-pandemic days for more than a year now, Signifyd’s Ecommerce Pulse data shows an additional, dramatic spike in mid-March spending that coincides with key events in the stimulus story. 

If the purpose of the federal legislation signed by President Joe Biden on March 11, was to literally rescue Americans from dire circumstances, the numbers are less clear, judging from the categories that saw spending increases, according to Signifyd’s Ecommerce Pulse data.

Ecommerce spending increased markedly on days that payments of as much as $1,400 per person landed in bank accounts and mailboxes. On March 17, the day nearly 100 million consumers received direct deposit payments, for instance, ecommerce spending was 183% higher than it was on March 17, 2020. The spending spree continued on March 18, when online sales were 165% above sales on the same day the year before.

The story repeated itself on March 22, the first business day after the IRS started mailing paper checks and debit cards. On that day, ecommerce spending was up 129% year-over-year. 

The big winners in terms of retail verticals were Electronics; Auto, Parts & Tires; Luxury Goods and Fashion, Apparel & Luggage — all of which saw online sales boom after stimulus payments were passed and signed into law. 

Ecommerce spending jumped dramatically during the “stimulus period”

And while the one-day spending increases are eye-catching when it comes to consumer behavior and retail sales, it’s often more telling to step back and take a broader look. To help with that perspective, Signifyd identified a “stimulus period,” stretching from March 12, the day after Biden signed the most recent COVID relief bill, to March 25, a week into the mailing of stimulus checks and debit cards.  

We compared the year-over-year growth in online spending from that period to the year-over-year growth in online spending for 2021 as a whole (up until March 25). From that vantage point, the year-over-year increases in certain key verticals during the stimulus period were striking. One note: Comparing the first quarter of 2021 to the first quarter of 2020 put several 2020 pre-pandemic weeks into the mix — meaning the stimulus effect was even greater than it might appear at first glance.  

As the chart below shows, electronics sales were up 209% in the March stimulus period, compared to 109% for 2021 so far. For Auto, Parts & Tires, the numbers were 121% compared to 50%; for Luxury Goods the stimulus increase was 113%, compared to 40% and Fashion, Apparel & Luggage was up 19%, compared to being down 17% for the year-to-date period.

The overall spending increases tell a story. But an analysis of which verticals saw increases tells its own, more nuanced, story. We’ll start with dividing the verticals into retail categories that primarily reflect “wants” and categories that primarily reflect “needs.” 

The reasons for stimulus spending are not clear cut

Granted, it’s impossible to know from the numbers themselves the reasons behind consumers’ purchases. And it remains unclear from ecommerce data whether the stimulus payments are rescuing consumers from dire circumstances.

For instance, current ecommerce data tells us only so much about spending on the most basic needs. Rent and mortgage payments would not be reflected in online data. And online sales in the Grocery & Household Goods vertical actually declined nearly 40% when you compare spending during the stimulus period to the same period in 2020. 

But the grocery statistic could be deceiving. Two things to keep in mind with online grocery sales: The March 2021 numbers are being compared to a year-earlier time when grocery sales were off the charts. The early pandemic days were marked by dramatic Grocery & Household Goods stockpiling. Second, while online grocery ordering is quickly growing in popularity, the overwhelming majority of grocery shopping is still done in stores.

Nonetheless, it’s interesting to explore through the lens of consumers’ behavior whether the stimulus is rescuing online-shopping Americans from a lack of necessities required to stay safe, healthy, housed and employed or whether it’s rescuing them from boredom and sameness.

Using the wants-and-needs framework, most would agree that Auto, Parts & Tires fall into the necessity category. A well-functioning and reliable automobile is a key means for workers to get to their jobs. Cars have become the primary tool for gig workers — those providing ridesharing and the host of delivery and errand services that have become lifelines for many in the pandemic. 

Necessity is in the eye of the consumer

Fashion, Apparel & Luggage certainly skew toward the need category, though admittedly the line blurs in places depending on just what kind of apparel is being purchased and for what purpose. Luxury Goods, by definition, tilt toward wants. Electronics are a mixed bag. No question, a functioning laptop and cell phone are necessities for a remote worker. Monitors, keyboards, printers, headphones and the like might also be needed for an efficient home office — or an efficient home schooling setup.

But some of those same electronic tools can be used for entertainment and no doubt are — if not solely, then in off-hours for workers and students. In the end, it’s a reminder that “needs” are often in the eye of the consumer. 

The stimulus payments also apparently provided a boost to another pandemic-driven trend. During 2020, Signifyd saw a wave of new online shoppers embrace ecommerce. The number of new online shoppers transacting on Signifyd’s Commerce Network increased by more than 32% in 2020 compared to 2019, according to Signifyd’s “The State of Commerce 2021: Redefining Experiences for a New Wave of Customers.”  

Another boost in new online shoppers — defined as a shopper not seen on Signifyd’s network of thousands of retailers for at least a year — coincided with the arrival of stimulus payments. In fact, the number of new shoppers transacting on Signifyd’s network was 40% higher during the stimulus period than it had been for the entire month of March. 

There is little doubt, based on Signifyd’s data, that stimulus payments are being put into circulation. Only time will tell whether the stimulus-aided jump in ecommerce spending is fueling the kind of economic activity that — along with other aspects of the American Rescue Plan — will carry the U.S. economy through until we reach a post-pandemic state of normalcy. 

Photo by Getty Images

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Overall, online sales were up by 50% in 2020 over 2019. It’s a dramatic increase, but it’s only part of the story. The changes in our shopping behavior varied wildly by product category over time and provided a clear proxy for the course of the coronavirus. 

Looking back at Signifyd’s Ecommerce Pulse data got me thinking about Abraham Maslow and the hierarchy of needs he constructed to explain how humans’ focus moves from the basics to security to higher-level fulfillment.

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As we move into the crucial Cyber Five period of holiday shopping, consumers appear to be more focused on safety and comfort than buying gifts. In fact, Signifyd Pulse data shows a marked rise in sales of the three G’s — groceries, gold and guns — items that consumers gravitate toward in search of security. 

And with new government restrictions in place — including lockdowns in the UK — sales of home goods in Europe are also on the rise. 

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There’s marketing, merchandising, fulfillment, customer support, building customer loyalty, brand value, getting a place at the table with the brick-and-mortar execs and building market share in the Amazon era.

In fact, there is so much to talk about in the fast-evolving field that sometimes one thing gets lost: The people doing the talking and the planning and the struggling and succeeding are human beings. Human beings first, in fact, and they bring that to work every day. Thank god.

At Signifyd’s recent FLOW Meet-Up, featuring Brianna Burwell — vice president, finance at Build.com and Dana Schwartz, vice president global direct to consumer & digital at Keen — it all came together. Two powerful retail leaders sat down with a virtual audience of 130 ecommerce professionals to talk about all of it: taking chances, rallying the troops amid COVID-19, pricing strategy, marketing pivots, being a mother, being new in town, being underestimated, being one of two women in the room — or company, living apart from a loving partner.

The pair’s wide-ranging virtual fireside with Signifyd Director, Customer Marketing Kalina Bryant provided a chance to learn — a chance to learn that also felt like a chance to breathe again.

COVID-19 has turned home into offices, schools and — well — home

“I didn’t specifically sign up for this,” Burwell, a mother of a two-year-old and a five-year-old, said of her COVID-19 work-life routine. “I signed up to work full time and to be a mom when I come home from work — and having those be separate. Right now they’re blended and so, while I didn’t necessarily sign up for it, it is my real life and my reality right now. So, it just means taking it one day at a time.”

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Signifyd brought the nearly a dozen retail leaders together as a way to share camaraderie and ideas — ideas about how to continue to soldier through the biggest business disruption in the lifetime of anyone born since the Great Depression. 

With a group including brands like Quiksilver, Stance, Guitar Center, Toms, Figs, U.S. Auto Parts, Allbirds, JLab Audio, Magnolia and Brilliant Earth, the products that the executives’ enterprises sell, their mix of stores and online and the maturity of their businesses varied. But the COVID-related experiences the retailers shared often sounded similar. 

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Ecommerce sales across Europe were tracking 32% higher than they were leading up to the pandemic, Signifyd Ecommerce Pulse data for the week ending June 28 shows. Some retail verticals are still registering blow-out numbers as the pandemic moves well into its fourth month.

Auto, Parts & Tires sales were up 250% for the seven-day period ending June 21, compared to the beginning of March, before the World Health Organization declared a pandemic. Home Goods & Decor is up 148%, Grocery & Household Goods is up 64% and Leisure & Outdoor is up 22%.

Interestingly, sales in the Business Supplies category are up 182% after a number of bad weeks scattered throughout the early part of the pandemic. The story recently has been quite the opposite, with week-over-week sales in Business Supplies up 174%. That comes after recent weeks that saw spending week-over-week in the category increase 59% and 122%.

It could be a tangible sign that businesses are beginning to open up again.

On the negative side, Electronics, General Merchandise, Leisure & Outdoor, Luxury Goods and Alcohol, Tobacco & Cannabis all saw online sales fall week over week in double-digit percentages or in numbers approaching double-digit percentages.

Still, only General Merchandise and Alcohol, Tobacco & Cannabis saw sales for the week that were lower than their pre-pandemic sales.

Ecommerce has been a bright spot for retail as the pandemic stretches on. In general, retailers who depend on brick-and-mortar sales or a combination of online and in-store sales have had little to cheer about. The Confederation of British Industry, for instance, released a report recently that painted a gloomy picture of retailers’ outlook in the UK.

Nearly 70% of retailers surveyed by the CBI said they expected businesses to be worse in July than it was a year ago, according to The Guardian. Nearly two-thirds said a lack of demand from consumers would be a major problem. Another 61% cited as a major concern workforce absences due to the fact that children wouldn’t be returning to school.

“With high street shops, department stores and shopping centers reopening across England last week amid some scenes of long queues, you’d be forgiven for thinking retailers’ difficulties are coming to an end,” said Rain Newton-Smith, the CBI’s chief economist, “but the health of the retail sector remains in the balance.”

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While it’s not possible to directly connect one to the other, The Guardian reported that in-store footfall during the week starting June 15 was up 45% over the previous week. Several outlets reported that British consumers exhibited a lot of pent-up demand for in-store shopping.

“There were also big queues outside the Nike store in Central London, although some complained there had been a lack of social distancing,” the BBC reported the day non-essential stores opened after being closed for three months. “In Manchester people waited for almost an hour outside Primark, TK Maxx and Foot Locker, although elsewhere demand was more subdued.”

It should also be noted that as enthusiastically as those who embraced in-store shopping embraced it, the number of shoppers out and about was nothing close to a normal pre-pandemic shopping day. In fact, The Guardian reported that footfall for reopening week was 54% below what it was the same week in 2019.

Though it seems the COVID-19 pandemic has been going on forever, it is still far too early to draw conclusions about shoppers’ behavior and how habits formed in the time of lockdowns and social distancing will affect the future of retail. Many have speculated that ecommerce is being propelled years into the future in terms of adoption.

Indeed, even with the 54% drop in online sales for the week ending June 21, overall ecommerce sales in Europe for the week were 35% higher than they were the first week of March, which we use as a pre-pandemic benchmark.

The most recent week did see some significant swings in some key retail verticals, according to the latest Pulse data. Sales in Business Supplies were up 59% week over week, a sign that shops and offices are opening up or planning to open up soon.

No other category came close on the upside, though Beauty & Cosmetics sales were up a respectable 13% week over week and Grocery & Household Goods were up 12%.

A number of categories endured rough weeks. Home Goods & Decor spending fell 29% week over week. The vertical has been a solid performer throughout the pandemic, as many consumers became much better acquainted with their homes. In fact, sales in the Home Goods & Decor vertical are up 162% over the pre-pandemic benchmark week.

Consumer Medical Supplies & Supplements was down 20% for the week, while both the General Merchandise and the Electronics categories fell 13% for the week.

It will remain interesting to watch the numbers in order to determine whether the opening of non-essential physical stores will have an effect on online sales. The Guardian, in its story about stores reopening in England, noted that footfall figures would have been higher in the UK, but that non-essential stores in Scotland and Wales had not yet opened.

“We anticipate an additional uplift to come when retail in these areas of the UK also reopens and the hospitality and entertainment industry is given the green light to resume trading in the coming weeks,” Diane Wehrle, of retail analytics company Springboard, told the Guardian.

Or it could be we find we’ve moved deeper into a genuine omnichannel world — one in which rather than take shoppers from each other, in-store and online commerce opportunities bring shoppers to one another.

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