Ecommerce: 2021 in Review
2021 was an absolutely wild year for many of us for any number of reasons. I could write an entire book about the roller coaster of my personal life over the past year or two, and I’m sure many of you reading this would be able to do so as well. However, I am here to tell you about ecommerce and maybe even some general trends in the worldwide marketplace in general. I will even be including things like facts and figures and statistics about market trends, it’s going to be very exciting for all of us. The numbers and statistics and whatnot will be towards the end of this entry, we’re going to start by going over some of the major events in 2021; so let’s get started, I say to myself as I type this into my word processor.
Pandemic
I probably don’t have to remind you, considering infection rates are skyrocketing and we are reaching record numbers of infections all over the world, and specifically in the US. People are losing their loved ones every single day and the personal impact of this literal plague cannot be overstated, but again, that’s not what we are here for, so let’s discuss the effect on commerce. As horrendous as this virus has been, it has had a massively positive impact on ecommerce due to people’s unwillingness to go to standard brick and mortar stores and risk getting infected. We were seeing this even in 2020, and these trends just carried on in 2021 as ecommerce continued to grow massively. Next week I will be looking at how things are shaping up for 2022, but spoiler alert; Ecommerce is set to continue growing rapidly, while brick and mortar is likely to continue stagnating.
Shortages
There are currently material shortages on basically everything. From construction materials to silicon chips needed in everything; it is a nightmare for anyone to get the things they need currently. These shortages show no signs of slowing down as the entirety of the world continues to grapple with both the continuing pandemic and also, those the world has already lost to the novel coronavirus. The shutdowns in all sectors have massively impacted supply chains. I wrote a more in depth blog about the shortages previously if you would like more information than what I’ve given in this brief overview, complete with sources for even more depth, in case you want a rabbit hole to fall down.
Suez Canal
This very much ties in with the shortages mentioned above, but there’s enough to give this a separate section, even if it will be brief. We all know that the Ever Given blocked the Suez Canal for six days in late March. The chairman of the Suez Canal Authority of Egypt said the damage caused by the blockage could be as high as $1 billion and we are still feeling the effects of that blockage even now, coming up on a year later and the decision was made to widen the canal to avoid this sort of thing in the future. What many people don’t know is that despite issues that reverberated throughout the entire world for most of 2021; revenue for the Suez Canal reached an all time high, and rose 12.8% over what they achieved in 2020. 20,649 vessels went through the canal, which was an increase of 10% over the number that passed through the canal in 2020.
The Great Resignation
The Great Resignation, also known as The Big Quit which is frankly a much worse name, is the result of millions of Americans quitting their jobs. In November 4.5 million people quit their jobs, which is about 3% of the labor force and a record high. The hardest hit industry, by far, is the service industry, from food service to hotel workers, which had nearly 7% of their workforce leave in November. There are those who would claim this is caused by a new generation that is unwilling to work, those people are utterly and completely wrong at best, and peddling propaganda at worst. It is clear to see by the kind of jobs people are quitting, that this mass resignation is driven by an unwillingness for people to risk their lives during a pandemic for a minimum wage that has stagnated for decades. Combined with over 800,000 confirmed deaths from covid, a number that is likely low according to experts, with a study published in early May that estimated the number of deaths in the US was over 900,000, it is clear that the people quitting service jobs are leaving for other fields where jobs have opened up because of all the destruction covid has wrought upon the world. In the first link in this section the author of the Fortune article pointed out that even with the huge number of people leaving their jobs, new hires were even higher. What the data implies, and Elise Gould, quoted in the Fortune article agrees with my reading, is that workers are confident that they can find better jobs. And here is where I bring it back to ecommerce; while this is terrible news for brick and mortar stores, this is incredible news for the ecommerce space. If someone is unable to go to a brick and mortar store to buy what they need due to shortages of either staff or materials, they’ll be significantly more likely to buy it online, even if that means they’ll be waiting for a bit due to material shortages, at least they’ll get their product.
Hard Numbers
Okay, so with the biggest whys touched on, let’s take a look at some good old fashioned numbers and statistics, which I have saved for the end because if you’ve read this far I’ve got my wordly hooks in you and you’ll stick around. The report I’m pulling this data from is specifically for Q4, so it deals in a lot of holiday shopping, but my research has shown that the trends hold true year round, there is obviously just more shopping done in Q4. There is really only one point I want to touch on in this particular blog entry from this study, and I will be going more into this study next week discussing the potential future that these trends indicate. That point is that 78% of consumers shopped for their holiday gifts online, with 46% of shoppers ONLY shopping online, with ads and posts from branded accounts on social media, whether followed or not, taking up the number two and three spots in influences for gift ideas, and only just behind people getting the ideas for gifts from posts by the people they are getting the gifts for. What this tells us is that it is crucial to be advertising your ecommerce brand, which seems obvious, if advertising weren’t important we would have stopped doing it a long time ago.
Conclusion
2021 was an absolutely wild ride of a year and many of the events during 2021 the world will be reeling from for quite a while. However, for ecommerce things continue to rise because the marketplace was forced to adjust to the fact that tons of people no longer want to leave their houses if they can help it. The move to a more online marketplace is not something that the world will be returning from. Brick and mortar is unlikely to ever take back its place as the primary way people buy goods, because why would it when we can all do our shopping online in our underwear? Ecommerce is no longer the way of the future, as it had been for so long. It is now the present and is absolutely here to stay.
Sources
All sources are linked in relevant text in this article, as well as listed here in order of when I referenced them for ease of reference. Which does not fit any standard style guides, but this is a blog post, not a formal article, so it’s fine.
https://www.oecd.org/coronavirus/policy-responses/e-commerce-in-the-time-of-covid-19-3a2b78e8/
https://www.roirevolution.com/blog/2022/01/coronavirus-and-ecommerce/
https://www.nytimes.com/2021/08/30/business/supply-chain-shortages.html
https://www.angora.solutions/post/the-global-supply-chain-and-the-disruptions-of-a-pandemic
https://fortune.com/2022/01/04/great-resignation-record-quit-rate-4-5-million/
https://covid19.who.int/region/amro/country/us
https://www.junglescout.com/consumer-trends/