Future of Retail 2021 - 10 Trends that Will Shape the Year Ahead
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Future of Retail
2021
10 Trends that Will Shape the Year Ahead
The coronavirus pandemic has caused retailers to retool their operational, merchandising,
and marketing strategies to align with consumers’ changing shopping habits. When things
return to normal, the realignment of retail will have lasting effects. This eMarketer Report
looks at our 2021 US retail and ecommerce sales forecast, highlighting 10 key trends
representing the most significant shifts in retail and consumer behavior this year.
presented byDear eMarketer Reader,
eMarketer is pleased to make this report, Future of Retail 2021: 10 Trends that Will
Shape the Year Ahead, available to our readers.
This report features eMarketer data and insights, and looks at our 2021 US retail and
ecommerce sales forecast, highlighting 10 key trends representing the most significant
shifts in retail and consumer behavior this year.
We invite you to learn more about eMarketer’s approach to research and why we
are considered the industry standard by the world’s leading brands, media companies,
and agencies.
We thank you for your interest in our report and Magento Commerce, part of Adobe
Experience Cloud for making it possible to offer it to you today.
Best Regards,
Nancy Taffera-Santos
Nancy Taffera-Santos
SVP, Media Solutions & Strategy, eMarketer
eMarketer, Inc. www.emarketer.com
11 Times Square, Floor 14 nancyts@emarketer.com
New York, NY 10036Future of Retail 2021: 10 Trends that Will Shape the Year Ahead
The coronavirus pandemic has caused retailers to retool their operational, merchandising, and marketing strategies
to align with consumers’ changing shopping habits. When things return to normal, the realignment of retail will have
lasting effects.
How much will US consumers spend on retail and
US Retail Sales, 2018-2022
ecommerce in 2021?
trillions and % change
Following a dip in 2020, we forecast that total retail $5.861
$5.630
sales growth will begin to recover in 2021, rising 2.3% to $5.315 $5.465 $5.506
$5.630 trillion. On the heels of outsized 32.4% growth in
2020, ecommerce sales growth will moderate to 6.1%.
Brick-and-mortar retail sales will rebound from a 3.2%
decline in 2020 to a 1.6% gain in 2021.
Which retailers are best positioned for 2021?
Amazon’s leadership will continue, while big-box retailers
4.8%
like Walmart, Target, The Home Depot, and Best Buy will 2.8% 2.3%
4.1%
0.8%
extend their omnichannel momentum. Digital-first retailers
like Instacart, Peloton, and Etsy will build on their 2018 2019 2020 2021 2022
pandemic-driven gains, while forward-looking brands like Retail sales % change
Nike and Lululemon will continue to successfully transition to Note: excludes travel and event tickets, payments (such as bill pay, taxes or money
transfers), food services and drinking place sales, gambling, and other vice good sales
digital and direct-to-consumer (D2C) models. Source: eMarketer, Sep 2020
260792 eMarketer | InsiderIntelligence.com
Which innovations will reshape physical retail?
Brick-and-mortar retail will incorporate digitally enabled Contents
technologies to make stores more experiential and
frictionless. Click and collect, cashierless checkout, 3 Future of Retail 2021
contactless payment, and digital signage will streamline 4 Key Themes Influencing the 2021 Retail Landscape
in-store transactions. Increased emphasis on atmosphere 5 eMarketer’s 2021 Retail and Ecommerce Forecast
and community-driven experiences will make retail 6 No. 1: D2C Brands Riding the Ecommerce Wave Will
more inviting. Encounter Stiffer Competition from Established Brands
7 No. 2: Media and Commerce Will Converge as Checkout
Which advancements will influence how consumers Attaches to Shoppable Content
shop online? 8 No. 3: Click-and-Collect Momentum Will Drive Market
Social commerce will play a bigger role in brand and product Share Gains for Big-Box Retailers
discovery for discretionary goods. Growing familiarity with 10 No. 4: Grocery Ecommerce Gains Will Evolve from Trial to
grocery ecommerce will push this habit forward. “Buy now, Habit Formation
pay later” adoption will make purchases more affordable in a 11 No. 5: Retail Media Trio Will Disrupt the Duopoly’s Digital
strained consumer economy. Ad Market Dominance
12 No. 6: Premium Subscriptions Will Drive Cross-Channel
WHAT’S IN THIS REPORT? This report looks at our 2021 Loyalty for Leading Retail Brands
US retail and ecommerce sales forecast, highlighting 10 key 14 No. 7: Digital Fitness Will Emerge as a Megatrend, as
trends representing the most significant shifts in retail and Aspirational Brands Segue into Consumer Health Market
consumer behavior next year. 16 No. 8: Next-Gen Marketplaces Will Leverage the
Economics of Scarcity to Forge New Flywheels
KEY STAT: Total US retail sales are expected to grow 2.3% 18 No. 9: Frictionless ‘Stores of the Future’ Will Land and
to $5.630 trillion in 2021. Expand
19 No. 10: ‘Buy Now, Pay Later’ Options Will Hit an Inflection
Point amid Strained Discretionary Budgets
20 Key Takeaways
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 3Key Themes Influencing the 2021 Rather than play defense, Nike went on offense. “Today,
we’re announcing a new digitally empowered phase of
Retail Landscape our Consumer Direct strategy,” Donahoe said. “We aren’t
settling for our current leadership position with consumers
We can’t predict the future of retail in 2021 without or in digital. We’re pursuing even further separation. We’re
fully acknowledging how the coronavirus pandemic transforming Nike faster to define the marketplace of the
magnified and accelerated prevailing industry trends. future. Now is the time to act.”
Perhaps the most adept company at confronting the
challenges, adapting to change, and embracing retail’s The pandemic hitting the global economy in February and
March 2020 was an unanticipated shock—a true crisis by
next paradigm is Nike.
any definition. And a crisis is a terrible thing to waste. At
a time when most brands retrenched from the threat to
On June 25, 2020, Nike Inc. reported the results for its
their business, Nike doubled down on the opportunity to
fiscal Q4, which ended on May 31, showing a dramatic 38%
accelerate its vision.
year-over-year decline in revenues, to $6.3 billion. This
peak-pandemic quarter—with headlines that looked like an
Nike now sits at the nexus of several transformative trends in
unmitigated disaster—may actually have been the best “bad
commerce, and—along with a handful of industry leaders—
quarter” in retail history.
exemplifies what to expect for the future of retail in 2021.
It was the first full quarter with new CEO John Donahoe,
former CEO of eBay and a Nike board member, at the helm.
Not exactly the sort of earnings most CEOs want to report Pandemic Drives Social, Political, and
to Wall Street analysts in their debut. But there were many Economic Uncertainty
bright spots in an otherwise tumultuous quarter as Nike
confidently hurtled toward a more digital future: The 2021 retail landscape will of course be shaped by the
pandemic—both its ongoing effects and the anticipated
■ Nike digital sales jumped 75% during the quarter as resumption of normal consumer behavior as the year
part of its “Consumer Direct” strategy. “You recall progresses. While we expect that a vaccine will begin to roll
that in fiscal year ’18, we set a goal to reach 30% digital out in early 2021, it will likely take until the second half of the
penetration by fiscal year ’23. We will reach that goal more year until widespread adoption has occurred.
than two years ahead of plan this coming year, and looking
ahead we now expect our overall business to reach 50% This should improve consumer sentiment and generally
digital penetration,” Donahoe said. support a strengthening of the economy. At the same time,
much of the financial carnage wrought by the pandemic
■ Workouts on the Nike Training Club saw a more than has not fully reverberated through the economy. Missed
threefold increase. Donahoe noted that Nike had used mortgage payments, long-term unemployment, and
its ecosystem of fitness and commerce apps “to directly small-business closures will mean many people in the US
engage with consumers in their homes as they focus on remain in financial dire straits. At the time of this writing, a
health and wellness.” second federal stimulus package has not been delivered by
Congress, and unemployment benefits are expiring.
■ Nike’s SNKRS app surpassed $1 billion in global sales
for the fiscal year. The app embodies Nike’s Consumer
Direct strategy, which Donahoe described as “directly
connecting with consumers, engaging them with our
The Reimagining of Digital and
powerful portfolio of activity apps, and then translating Physical Retail
that into both digital online and offline relationships where The pre-pandemic transformation of brick-and-mortar retail
they purchase more.” has been only accelerated during the crisis. The long-term
shift away from malls is driving mass store closures among
department stores and other traditional mall retailers.
Undifferentiated commodity goods retailers are also finding
less reason for being in the current environment. More doors
will shutter.
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 4But the destruction of old retail will provide openings for Ecommerce sales will grow just 6.1% in 2021, a major
the green shoots of modern retail concepts to emerge. New divergence from its 2020 growth rate of 32.4%. But this
flagships, store-of-the-future concepts, small-footprint D2C should not be interpreted as a suddenly bearish view of
locations, click-and-collect hubs, and dark stores will begin ecommerce growth; rather, it’s a reflection of the inherent
to dot the brick-and-mortar landscape, giving us a glimpse challenge of sustaining the somewhat artificially inflated
of what next-generation retail has in store. levels of 2020 as consumers’ buying habits normalize. A
better way to look at ecommerce growth is to take the
two-year compound annual growth rate (CAGR) for 2020
Power Brands Redefine the Landscape and 2021, which translates to 16.8%—far ahead of the
preceding two-year CAGR of 14.1%.
At the forefront of this physical transformation will be
the world’s iconic brands. Amazon will expand its brick-
and-mortar footprint, while the titans of big-box retail US Retail and Retail Ecommerce Sales Growth,
like Walmart, Target, and Best Buy have strengthened 2016-2022
their positions. Forward-thinking retail brands like Apple, % change
Nike, Lululemon, and Starbucks will innovate their store
32.4%
experiences through digital integration, frictionless
shopping, and improved atmospherics. Together, these
power brands are paving the future of retail and introducing
the new models that others will follow. 16.8% 16.0%
13.6% 14.6%
13.0%
6.1%
4.5% 4.8% 4.1%
2.8%
eMarketer’s 2021 Retail and 2.8%
3.4% 3.9%
0.8% 2.3%
Ecommerce Forecast
0
1.7% 1.5% 1.6% 2.5%
-3.2%
With the worst of the pandemic in the rearview mirror, 2016 2017 2018 2019 2020 2021 2022
we expect the US consumer economy to show signs Retail ecommerce sales Nonecommerce retail sales Total retail sales
of progress in 2021. Total US retail sales will grow Note: retail sales exclude travel and event tickets, payments (such as bill pay, taxes, or money
transfers), food services and drinking place sales, gambling, and other vice good sales; retail
2.3% to $5.630 trillion, up from a 0.8% projected 2020 ecommerce sales include products or services ordered using the internet, regardless of the
method of payment or fulfillment; excludes travel and event tickets, payments (such as bill
growth rate. pay, taxes, or money transfers), food services and drinking place sales, gambling, and other
vice goods sales; nonecommerce retail sales exclude products or services ordered using the
internet; excludes travel and event tickets, payments (such as bill pay, taxes, or money
transfers), food services and drinking place sales, gambling, and other vice good sales
Source: eMarketer, Sep 2020
US Retail Sales, 2018-2022 260793 eMarketer | InsiderIntelligence.com
trillions and % change
$5.861 A comparison of our most recent ecommerce forecast from
$5.506 $5.630
$5.315 $5.465 September 2020 with our pre-pandemic forecast from
January 2020 underscores longer-term acceleration of the
market. We expect that ecommerce has effectively moved
one full year into the future, reaching $952.76 billion in
2022—similar to the level we previously expected in 2023.
4.8% 4.1%
2.8% 2.3%
0.8%
2018 2019 2020 2021 2022
Retail sales % change
Note: excludes travel and event tickets, payments (such as bill pay, taxes or money
transfers), food services and drinking place sales, gambling, and other vice good sales
Source: eMarketer, Sep 2020
260792 eMarketer | InsiderIntelligence.com
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 5How Has Our Forecast for US Retail Ecommerce Sales The D2C movement launched several startups that are
Changed? destined to be power brands, if they haven’t achieved that
billions and % change, 2020-2023 status already: Peloton, Warby Parker, Glossier, Brooklinen,
.6
% Chewy, and Quip, to name a few.
8% 0% . 3% 12
% . 4% 12. 1% . 5% 3. 12 81
.2 32 6. 12
1 6 2.
13 0 .26 1 5 2 .76 7
1. ,07
.88 .5 61 3. .4 52 6
$1
74 94 $7 4 56 $9 $9 To learn more about the rise of D2C brands, read “Direct-to-
$6 $7 $8 $8
Consumer Brands 2020: Growing Pains Hit Disruptor Brands
on Their Path to Maturity.”
But for every successful disruptor brand, there’s another
that’s fallen on hard times as it encounters the reality of
posting profitable growth against sophisticated, well-
capitalized category stalwarts. When an Outdoor Voices
stumbles on its path to growth, there’s a Lululemon ready
to pounce.
2020 2021 2022 2023
Jan 2020 forecast Sep 2020 forecast
“Success leaves footprints, and there’s certainly evidence
out there that social has helped build [D2C brands] from the
Note: includes products or services ordered using the internet, regardless
of the method of payment or fulfillment; excludes travel and event tickets, ground up,” said Elliot Mustoe, growth marketing manager
payments (such as bill pay, taxes, or money transfers), food services and at Brooklinen. “For a long time, brands exclusively relied on
drinking place sales, gambling, and other vice goods sales
Source: eMarketer, Sep 2020 Facebook and Instagram as their social outlets, but the past
260638 www.eMarketer.com
year has seen ad product development across Pinterest,
Ecommerce will remain a bright spot in retail, but 2021 will Snapchat, and TikTok.”
see ongoing challenges stemming from the pandemic. As
The combination of growing inventory, brands pulling back
we advance toward another transformational year, here are
ad spend, and the overall rising tide of ecommerce growth
the top 10 trends that will most shape the behavior of retail
reopened the narrowing apertures of opportunity facing
marketers and consumers in 2021.
many D2Cs. “As rates have become less competitive,
demand hasn’t dropped, allowing for brands in relevant
categories to continue driving sales in these social
No. 1: D2C Brands Riding the commerce channels,” Mustoe said.
Ecommerce Wave Will Encounter Established brands aren’t taking this disruption lying down,
Stiffer Competition from and they recognize developing their own D2C strategies
Established Brands as a new imperative. “The 97% of brands that historically
were disconnected from their end consumers now must
be directly connected to them,” said Randall Rothenberg,
D2C brands have been the darlings of ecommerce
executive chair at the Interactive Advertising Bureau (IAB).
over the past few years, but their quest to achieve the
escape velocity needed for mainstream adoption is The strongest brands are taking it a step further, recognizing
encountering increasing resistance. As low barriers to the D2C movement for what it is—a massive value-creation
entry foster intensifying competition from other opportunity. Nike is a prime example, leaning heavily into its
D2Cs, once-effective social media marketing strategies Consumer Direct strategy. By the end of 2020, D2C sales
will account for 33.1% of Nike’s revenues.
get harder to play. Now they’re facing larger and
better-known competition for the same eyeballs as
established brands go direct to consumers.
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 6Nike Direct-to-Consumer Sales Worldwide, “The medium is the store, and the store is the medium,”
2010-2020 IAB’s Rothenberg said. “The biggest change we saw
% of total revenues this year—and it’s a real acceleration—is that the brand-
33.1% distribution supply chain and brand-awareness supply chain
30.0% are collapsing into each other. They’re now kind of the same
28.7%
thing. The simplest way to think about it is that it’s all about
25.0%
22.9%
that screen we’re looking at.”
20.5%
17.3% D2C brands understand that social media’s prowess in
15.7% rapid audience aggregation and brand discovery made it
13.5% 14.3% 14.1%
an unusually efficient vehicle for this. Now these platforms
are trying to help brands close the loop on purchase.
Facebook, Instagram, Pinterest, and Snapchat have all
recently introduced features allowing retailers to upload their
product catalogs to make discovery even easier. Several
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
platforms—most notably Instagram—also integrated
Source: NIKE, Inc. company reports as cited by Statista; eMarketer calculations, Nov 10,
2020 checkout experiences (supported by Shopify for payment
260830 eMarketer | InsiderIntelligence.com and logistics) to streamline conversion.
“Nike has seen the overall trends and made very considered This has driven a clear shift in social commerce purchases.
bets over a 20-year period, which can then be scaled up According to CivicScience, the percentage of US adults who
when they succeed,” Rothenberg said. have purchased products directly on social media has nearly
doubled over the past two years—from 13% in Q4 2018 to
Lululemon posted D2C sales growth of 157% in Q2 2020
25% in Q3 2020.
as it drove 61.4% of net revenues—though unlike Nike, it
does not have a significant wholesale business with other
distribution partners. Levi Strauss and adidas both reported US Adults Who Purchase Products Directly on Social
Media, Q4 2018-Q3 2020
D2C sales reaching approximately 40% of their revenues
% of respondents
during the most recent quarter. 25%
24%
22% 22%
As brands pull more sales through their digital storefronts, 21%
they benefit from additional first-party data, stronger 18%
customer relationships, and margin expansion. With
incentives pushing established brands to advance their D2C 14%
13%
strategies, next year’s landscape will be more competitive.
The disruptor brands that use this time to get into fighting
shape will be the ones that advance to the next round.
No. 2: Media and Commerce Will Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
Converge as Checkout Attaches Note: ages 18+
Source: CivicScience, "Trend Adoption Tracker," Oct 4, 2020
to Shoppable Content 259995 www.eMarketer.com
As social commerce gains traction, it’s evolving across
D2C brands have long understood the new commerce formats (video) and media environments (TV). And brands
paradigm that bypasses traditional distribution are getting on board. According to an IAB study conducted
methods. They understand we live in an era of by Advertiser Perceptions, the percentage of brands using
convergent media and commerce, where brand value shoppable video ads has risen from 25% in 2018 to 40%
resides in aggregating audiences, cultivating demand, in 2020.
and converting that into purchases as seamlessly
as possible.
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 7Shoppable Video Ad Usage According to US “The missing link in the US is still in-video checkout,”
Agency/Marketing Professionals, 2018-2020 said Deborah Weinswig, founder and CEO of Coresight
% of respondents and % change Research, a global advisory and research firm specializing
40% in retail and technology. “Most livestreaming videos, posts,
(21%) or advertisements on social media platforms include tags or
links to a third-party website rather than having built-in
33%
purchasing functionality, meaning that the shopping
experience is not seamless.”
25%
New possibilities of media and commerce convergence
abound. Peloton’s built-in subscription fitness experience
is tailor-made for layering on its small but growing apparel
business. Disney+ is a tantalizing medium for commerce
integration. Expect to see even more experimentation in the
year ahead.
2018 2019 2020*
Note: *estimate
Source: Interactive Advertising Bureau (IAB), "U.S. 2020 Digital Video Advertising Spend
Report: Putting Covid in Context" conducted by Advertiser Perceptions, June 23, 2020
260898 eMarketer | InsiderIntelligence.com No. 3: Click-and-Collect
Much of this activity resides on social media platforms Momentum Will Drive Market
currently, but where it goes next may be even more Share Gains for Big-Box Retailers
interesting. Some examples of innovations that have taken
place already include: Even before the pandemic, click and collect was a
growing trend as US consumers found they enjoyed the
■ Livestreaming commerce—which has exploded in China
convenience and cost-savings of purchasing online and
and is an area of intense interest. Amazon Live is the
ecommerce giant’s version of QVC or HSN, a feature it has picking up their order on the way home from work or
heavily promoted during recent Prime Day events. while running errands.
■ NBCUniversal’s shoppable TV ads, which debuted during The pandemic turned this behavior from a convenience to a
the 2019 French Open with Lacoste as the pilot sponsor. necessity almost overnight, particularly for essential goods
The media conglomerate also added a direct checkout and groceries. In March and April, as logistics networks
feature in April 2020. furiously expanded their capacity to support the ecommerce
demand shock, online delivery windows were scarce and
■ Various livestreaming shopping features rolled out by
delays were inevitable. Click and collect—and particularly
YouTube, Facebook, and Instagram in 2020. TikTok isn’t as
curbside pickup—helped plug the gap for millions
far along on features in the US, but it has huge potential.
of consumers.
“[Livestreaming] is a space that is very vibrant and alive,” said
Katie Puris, managing director and global head of business According to our bimonthly ecommerce survey conducted
marketing at TikTok. “It’s a sound-on environment, so people by Bizrate Insights, the incidence of click and collect rose
are extremely immersed, and everything is full-screen video. from 18% in February to a high of 22% in June—a level that
The technology will continue to evolve, and we’ll see more was sustained through October. The rise in curbside pickup
commerce on it.” was even more dramatic, jumping from 7% in February to
22% by June, though levels have subsided a few points from
their peak.
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 8Which Delivery Methods Did US Digital Buyers Use for Though the pandemic created the impetus for the behavior,
Digital Purchases in the Past Month? it will carry forward into the future. A 2020 Deloitte study
% of respondents, Feb-Oct 2020 asked respondents, in both April and September, their
Feb April June Aug Oct reasons for adopting click and collect. In April, the top
2020 2020 2020 2020 2020
reason cited was “safer” (48%), followed by “faster than
Delivered to my home/work 91% 91% 90% 91% 91%
Picked up at the store 18% 17% 22% 20% 21%
shopping in-store” (34%) and “less stressful” (33%). By
Picked up curbside at the store 7% 13% 22% 20% 18% September, the top reasons were “safer” (35%), “cheaper
(didn't have to get out of the car) than delivery” (33%), and “faster” and “less stressful” (both
Delivered to locker not at a store 4% 3% 3% 3% 2%
location (e.g., Amazon Hub Locker)
32%). As safety concerns subside, it’s easy to see how the
Other 2% 2% 3% 2% 2% cost and convenience dimensions will persist.
Note: February n=1,069; April n=1,070; June n=1,000; August n=1,042;
October n=1,005; among those who made a digital purchase in the past
month/30 days; surveys conducted every two months Reasons that US Adults Are Using Click and
Source: "The eMarketer Ecommerce Survey" conducted in October 2020 by
Bizrate Insights, Oct 5, 2020 Collect, April 9 & Sep 17, 2020
259844 www.eMarketer.com % of respondents
April 9, Sep 17,
Adoption wasn’t driven only by the demand side. Retailers 2020 2020
also needed to ramp up their availability of click-and-collect Safer 48% 35%
options to accommodate this newfound demand and to Quickly check stock 30% 26%
have any hope of recovering lost sales due to the pandemic. Faster than shopping in-store 34% 32%
According to Digital Commerce 360, the percentage of Top Less stressful 33% 32%
500 North American ecommerce retailers offering curbside Apps know my preference 10% 13%
Cheaper than delivery 26% 33%
pickup leapt from just 6.9% in December 2019 to 43.7% in
Faster than delivery 23% 29%
August 2020.
Support local stores 25% 20%
Better for environment 14% 14%
Retailers in North America Offering Curbside Source: Deloitte, "Global State of the Consumer Tracker" as cited in Deloitte's "2020 Holiday
Retail Survey," Oct 20, 2020
Pickup, Dec 2019 & Aug 2020 260967 eMarketer | InsiderIntelligence.com
% of total*
43.7% And shoppers believe these habits will stick. According to
GlobalData, when asked which behaviors consumers expect
to do more often once things have returned to normal,
68.2% of US adults said curbside pickup, and 59.6% said
in-store pickup.
Fulfillment and Return Methods US Adults Plan to
Use More of After the Coronavirus Pandemic,
July 2020
6.9%
% of respondents
Collect digital orders from curbside/outside a store 68.2%
Dec 2019 Aug 2020
Collect digital orders from inside a store 59.6%
Note: *based on 245 retailers from Digital Commerce 360's Top 500 North American
retailers in August 2020 Return an item bought digitally to a store 49.7%
Source: Digital Commerce 360 as cited in Interactive Advertising Bureau (IAB), "Brand
Disruption Report 2021" sponsored by eBay, Facebook, Google, and TikTok, Nov 9, 2020
Source: GlobalData, "Multichannel Retail and COVID-19," Sep 15, 2020
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Grocery is the original and best use case for curbside pickup,
and it’s where the behavior is most likely to carry forward
into the future. Mass merchants that offer curbside grocery
pickup alongside other household purchases, like Walmart
and Target, will benefit the most in 2021.
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 9No. 4: Grocery Ecommerce orders that temporarily shifted to ecommerce channels will
revert back to in-store.
Gains Will Evolve from Trial to
Habit Formation Much of the 2020 gains came from first-time grocery
ecommerce buyers. Our latest estimate pegs the number
Grocery has undoubtedly been the ecommerce of digital grocery buyers at 131.0 million in 2020, up
category winner of the pandemic. As widespread 41.9% from the prior year and representing 38.7 million
additional buyers.
shelter-in-place mandates kept people at home and
out of physical stores, tens of millions of US consumers
became online grocery buyers for the first time. US Digital Grocery Buyers, 2018-2022
millions, % change, and % of internet users
Food/beverage—the least penetrated ecommerce 143.1
137.4
131.0
category—will see the biggest growth in 2020, with sales
surging 74.0% to $45.47 billion. That’s $13.25 billion more
in sales beyond our pre-pandemic expectations, and 92.3 56.3%
52.9% 54.7%
an upward revision of the growth rate by more than 50
76.3
percentage points. 37.8%
47.5%
41.9%
How Has Our Forecast for US Food and Beverage 32.0%
Retail Ecommerce Sales Changed?
21.0%
billions and % change, 2020-2024 4.9% 4.1%
% % % % % % % %
.4 .0 .4 5% .8 .3 .1 0.5 .0 9.6%
23 74 22 5. 19 22 18 2 17 1 2018 2019 2020 2021 2022
2 2 4 7 4 4 9 6 2 5 6 3 8 2 6 5 3 4 50
3 2. 4 5. 3 9. 47. 4 7. 58. 5 5. 70. 6 5. 84. Digital grocery buyers % change % of internet users
$ $ $ $ $ $ $ $ $ $
Note: ages 14+; digital grocery buyers are defined as internet users who have made at least
one grocery order via any digital channel during the calendar year regardless of method of
payment or fulfillment; includes grocery delivery and pickup
Source: eMarketer, Sep 2020
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The influx of new category buyers include many low-
propensity digital grocery shoppers, including older US
consumers with a strong incentive to steer clear of public
spaces during a pandemic.
2020 2021 2022 2023 2024
There will be an evolution of digital grocery buying in
2021. Many low-propensity buyers will return to their
Jan 2020 forecast Sep 2020 forecast
pre-pandemic purchase behaviors once the threat is
Note: includes packaged foods, fresh foods, and beverages; includes
products or services ordered using the internet via any device, regardless sufficiently mitigated through vaccines. Other consumers,
of the method of payment or fulfillment; excludes travel and event tickets, now acclimated to the process of buying groceries online,
payments such as bill pay, taxes or money transfers, food services and
drinking place sales, gambling, and other vice goods sales will do so on an occasional basis. But those who developed
Source: eMarketer, Sep 2020
a regular habit around buying groceries online will carry
260644 www.eMarketer.com
this behavior forward. Continued growth in digital grocery
More importantly, the pandemic has pulled grocery will now depend more on purchase frequency than new
ecommerce at least a year into the future. We now expect category buyers.
grocery ecommerce to reach $47.96 billion in 2021, ahead of
the level we originally anticipated for 2022. “While we have seen a gradual slowing in growth rates
for US online food sales, the levels remain elevated, and
Nevertheless, we expect grocery ecommerce to increase consumer participation rates are still high,” Weinswig of
at a single-digit rate of 5.5% in 2021, which may seem Coresight Research said. “In fact, the latter has trended
counterintuitive given the dramatic acceleration of 2020. slightly upward over the past three months, implying that the
That forecast assumes that as consumer behavior market slowdown is being driven by decreased frequency or
normalizes once a vaccine rolls out, many of the grocery smaller basket size per online shopper.”
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 10Rakuten Intelligence data indicates that purchase Amazon is the biggest player in an emerging segment
frequency—at least among online grocery buyers in a given of digital advertising—retail media platforms—that will
month—climbed from 2.3 orders in March to 2.9 in October. surge over the next few years and eat into the duopoly’s
dominance. The two big up-and-coming retail media
platforms after Amazon are Walmart and Instacart. The next
US Digital Grocery Buyer Growth and Orders
tier includes large digital marketplaces like eBay and Etsy
per Buyer, Oct 2019-Oct 2020
and multichannel retailers Kroger and Target.
orders per buyer and % change in buyers vs. same
period of previous year
Retail media has a key advantage over Facebook and
2.9 2.9 2.9
2.6
2.8 2.8 2.8 Google. Their platforms are powered by the combination of
2.4 2.4
2.5
2.4 high-intent keyword searches and shopper data, giving them
2.3 2.3 114%
115% 111%
105% 105%
an even better ability than their duopoly counterparts to
96% 94% target the right customers with ads.
96%
And advertisers are voting with their wallets. According
46%
44% to a Catalyst and Kantar study of US retailers, Amazon
51%
45% 45% Advertising (67%) and Walmart Media Group (67%) ranked
atop a list of digital ad platforms on which they were most
likely to increase ad spending.
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
2019 2020
US Retailers' Spending Plans for Digital Ad
Orders per buyer Platforms, April 2020
% change in buyers vs. same period of previous year
% of respondents in each group
Source: Rakuten Intelligence, Nov 24, 2020
Increasing Same Decreasing
261656 eMarketer | InsiderIntelligence.com
Amazon Advertising 67% 24% 9%
But not every buyer participates every month, so over a WMG (Walmart) advertising 67% 24% 9%
quarterly or annual time horizon, the frequency picture could OTT/Connected TV 66% 24% 10%
look very different. It’s a complex dynamic that will determine YouTube ad 66% 23% 11%
Social media ad 63% 28% 9%
how grocery ecommerce grows in 2021. With the possibility
Podcasts 60% 30% 11%
of new-to-category digital grocery buyers churning out
Email marketing 57% 36% 7%
of the market in 2021, those who stick with it will need
Paid search 57% 32% 11%
to ratchet up their order frequency to foster continued Target advertising/Roundel 56% 37% 8%
category growth. Audio 54% 26% 19%
Digital out-of-home advertising 53% 24% 24%
Organic search 51% 41% 8%
Kroger advertising 50% 27% 23%
No. 5: Retail Media Trio Will Product listing ads 49% 46% 6%
Disrupt the Duopoly’s Digital Ad Influencer marketing 47% 35% 18%
Display ad 44% 38% 18%
Market Dominance Note: read as "67% of retailers investing in Amazon Advertising plan to increase their
budgets for this platform"; numbers may not add up to 100% due to rounding
Source: Catalyst and Kantar, "The State of Ecommerce 2021," Aug 3, 2020
Amazon, Walmart, and Instacart will become new 261661 eMarketer | InsiderIntelligence.com
power players in the digital ad ecosystem, and the
Better data is the differentiator against the duopoly.
Facebook-Google duopoly may not fully appreciate that
Amazon, Walmart, and Instacart possess massive troves
a disruptive force will come into full view in 2021. of online and offline purchase data to demonstrate the full
impact of their advertising. The clean line of sight into high
While the two dominant ad platforms are still posting strong volumes of brand-purchase activity, which makes it easy for
revenue growth, No. 3 player Amazon’s footsteps are getting advertisers to track return on investment (ROI), encourages
louder. In fact, in 2020, Amazon’s US digital ad market share them to keep investing in the platforms.
will jump 2.4 points to 10.2%, while the duopoly’s combined
market share will dip by almost a percentage point.
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 11Retail media platforms’ low-hanging fruits are search inventory, and COVID-19 has accelerated [that ecommerce
and branding ads on their owned and operated digital demand] to where Instacart is seeing explosive growth.”
properties. We forecast that these ecommerce channel ads
will jump 38.8% in 2020 to $17.37 billion and will double to Weinheimer said Instacart has a low hurdle for adoption
$34.00 billion by 2023. because of its similarities to Amazon: “It’s more apples to
apples with Amazon, where the majority of the inventory is
lower-funnel, so that’s where most of the early adopters are
US Ecommerce Channel Ad Spending, 2019-2023
billions and % change focusing first. And they’re coming back for more, because
$34.00
the returns are extremely significant.”
$28.57 The opportunity outside of ecommerce channel advertising
is even more interesting. Through their respective demand-
$22.54 side platforms (DSPs), retail media platforms can deliver
display and video ads across other digital media. That’s
$17.37
37.7% primarily on the open web today but is destined to transition
to ad-supported over-the-top (OTT) video, giving them a
38.8%
$12.52 major opportunity to tap TV ad budgets. Eventually, these
29.8%
26.8% platforms will power digital in-store media as well.
19.0%
Amazon, Walmart, and Instacart have the inside track on
2019 2020 2021 2022 2023
these massive opportunities, and in 2021 their formidable
Ecommerce channel ad spending % change positions and momentum will become apparent. Large
Note: digital advertising that appears on websites or apps that are consumer brands, if they haven’t already, need to allocate
primarily engaged in retail ecommerce; examples include advertising on
Amazon, Walmart, and eBay; excludes advertising on social networks or budget now so they can take full advantage as these
search engines
Source: eMarketer, Oct 2020 platforms scale.
259640 www.eMarketer.com
Amazon will drive most of this ad spend in 2021, as it
has already proven its value to brands. But Walmart and No. 6: Premium Subscriptions Will
Instacart are the real forces to watch with their huge
Drive Cross-Channel Loyalty for
footprints of in-store sales data—Walmart with cross-
category purchase behavior in its nearly 5,000 US retail Leading Retail Brands
locations, and Instacart with its partnerships with more
than 400 grocery chains across 30,000 stores in the US Every retailer wants its own version of Amazon
and Canada. Amazon comes nowhere close to that level of Prime—a high-margin, rrecurring-revenue loyalty
visibility into offline purchase activity—at least not yet. engine. In 2021, several retail power brands will succeed
with premium subscriptions that will result in market
While Walmart is the current No. 2 player in ecommerce
share gains and profit expansion.
channel advertising, with an estimated $849 million in
revenues in 2020 and forecast to reach $1.32 billion in 2021,
There’s a tendency to pigeonhole retail loyalty programs
Instacart shouldn’t be underestimated. Former Amazon
as direct competitors to Prime—but that’s a false premise.
advertising executive Seth Dallaire is Instacart’s new chief
Matching Prime’s dominance is not only an unreasonably
revenue officer, helping the company stand up a high-
tall order, it fails to appreciate that loyalty programs aren’t a
powered ad platform at lightning speed. It’s only a matter
zero-sum game. Their success should instead be measured
of time before big consumer packaged goods (CPG) ad
by how well they drive their own businesses forward.
budgets start flowing in its direction.
The most obvious Prime “competitor” is Walmart+, the $98
Nich Weinheimer, general manager of ecommerce at
per year subscription featuring benefits like free two-day
Kenshoo, calls Instacart a “unicorn” opportunity for CPG
delivery for ecommerce orders, gas price discounts, and
brands, explaining that while grocery has huge demand
scan-and-go capabilities to skip in-store checkout.
overall, it has been supply-constrained in the ecommerce
environment. “The world’s largest brands want that grocery
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 12According to August 2020 research from Tinuiti conducted Expected Share of Holiday Ecommerce Spending
by Survata, 50% of US Amazon Prime members said they on Walmart* Among US Walmart+ Member
would sign up for a Walmart loyalty program while keeping Segments, Oct 2020
their Prime subscription. Just 6% said they would sign up % of respondents in each group
and cancel their Prime subscription. Non-Walmart+ members
37.3% 37.0% 18.0% 7.7%
US Amazon Prime Members Who Would Sign Up for a Walmart+ members
Walmart Loyalty Program with Perks, Aug 2020 8.1% 32.4% 38.2% 21.3%
% of respondents Walmart+/Amazon Prime members
5.9% 29.7% 38.7% 25.8%
0% 1-19% 20-39% 40%+
No, don't shop
at Walmart Note: numbers may not add up to 100% due to rounding; *website or mobile app
22% Source: DISQO, Nov 17, 2020
Yes, but would 261659 eMarketer | InsiderIntelligence.com
keep Amazon Prime
No, loyal to subscription
Amazon Prime
22%
50% Interestingly, 64.5% of those who were concurrently
Walmart+ and Amazon Prime members expected to spend
at least 20% with Walmart. And this wasn’t a tiny overlap
Yes, and would cancel segment—69.2% of Walmart+ members were also Prime
Amazon Prime subscription members. This suggests that loyalty membership isn’t a
6%
zero-sum game, and that membership decisions are not
Source: Tinuiti, "The State of Amazon Prime in 2021" conducted by Survata,
Oct 15, 2020 necessarily a choice between competing programs so much
259885 www.eMarketer.com as they are made on whether or not that individual program
provides surplus value to the consumer.
The study provided a useful temperature check for the
viability of a Walmart program, but what people say they will
The spotlight might be on the Amazon Prime vs. Walmart+
do and what they actually do is often different. Research
battle at the moment, but there are more memberships
from DISQO conducted in October 2020 paints a more
taking shape. In September, Apple introduced Apple One, a
realistic picture for Walmart+ and its potential. According to
subscription bundle that includes Apple Music, Apple TV+,
the survey, 5.1% of respondents said they were already paid
Apple Arcade, and 50 GB of iCloud storage, with a premier
subscribers to Walmart+, and 9.0% said they expected to be
version that also includes Apple Fitness+ and Apple News+.
paid subscribers within the year.
“As with most things Apple does, it is a very long play,”
Current vs. Expected* Walmart+ Paid Subscribers, said Dan Frommer, founder and editor-in-chief of The
Oct 2020 New Consumer, noting that the current incarnation may
% of respondents not deliver enough value. “What you could see is Apple
One increasingly being an obvious choice over time as the
Current 5.1%
company adds more services. I don’t know whether Fitness+
Expected* 9.0% is going to be compelling enough to push people into the
Note: *by next year plan on its own. You could see Apple TV+ start to have more
Source: DISQO, Nov 17, 2020
breakthrough success.”
261658 eMarketer | InsiderIntelligence.com
The DISQO survey also underscored the value of
membership. When asked what percentage of their 2020
holiday ecommerce spending they expected to spend on
Walmart, 59.5% of Walmart+ members said they would
spend at least 20% with Walmart vs. 25.7% among
non-Walmart+ members.
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 13With Amazon Prime, members primarily pay for the fast “There’s a cultural trend around fitness that has magnified
and free shipping benefits, but the inclusion of Prime Video over the past decade. Social media has actually made
makes it a no-brainer in terms of value. And as CEO Jeff fitness something to show off—either for accountability
Bezos famously said, “We get to monetize [our subscription purposes or to show off that you’re mindful of your health.
video] in an unusual way. When we win a Golden Globe, it It’s cool to work out and be sporty in a lot of places.”
helps us sell more shoes.” Apple One hasn’t reached
no-brainer status yet, but the company has deep pockets According to our latest forecast, US health and fitness
to invest in premium programming for Apple TV+ (which is app users will jump 27.2% to 87.4 million in 2020. An
getting a lift from Richard Plepler, former chairman and already sizable and growing market just put its foot on the
CEO of HBO) and Apple Fitness+. It’s easy to imagine a accelerator as the pandemic pulled fitness into the home.
not-so-distant future where this premium subscription While the number of users will dip slightly next year, most of
reaches a tipping point. the 2020 bump will be retained going forward.
Brands like Nike, Lululemon, and Disney are experimenting
US Health & Fitness App Users, 2018-2022
with the right value exchange for their own subscription millions and % change
offerings. But it’s clear that they’ll be able to parlay 87.4 86.3
84.0
strong brand affinity, in-demand products, subscription
media, digital assets, and physical experiences into
68.7
attractive bundles. 62.7
No. 7: Digital Fitness Will Emerge 27.2%
as a Megatrend, as Aspirational
11.5%
Brands Segue into Consumer 2.6%
Health Market 0
9.7% 2021
2018 2019 2020 2022
-3.8%
Connected fitness may be one of the most profound
Health & fitness app users % change
trends to sprout from the pandemic, and in doing so
Note: smartphone users of any age who use at least one health/fitness app
will further elevate four leading power brands—Nike, on their smartphone at least once per month
Source: eMarketer, July 2020
Lululemon, Peloton, and Apple. 256417 www.eMarketer.com
What do all four have in common? They’re aspirational One of the biggest winners of the pandemic is Peloton,
brands with loyal followings; they produce high-quality and the aspirational fitness brand that developed an early cult
high-margin products; they posses digital technology and following from its $2,000 stationary bike and subscription
media capabilities; and they offer community-oriented retail fitness classes. The company’s worth has quadrupled from
experiences. Each company is approaching the market an $8.1 billion valuation at its September 2019 IPO to a
from a slightly different angle, but they all know a huge market capitalization of more than $30 billion today.
opportunity when they see it.
Peloton’s revenues and profits have soared, but the
“The trend of digital personal fitness started many years company’s usage metrics are even more impressive.
ago with products like the Jawbone UP and Fitbit with an Total connected fitness subscriptions have doubled from
early-adopter crowd of ‘quantified self’ people,” Frommer 563,000 to 1.3 million over the yearlong period ending on
of The New Consumer said. “This is one of those trends, September 30, 2020, while the average monthly workouts
and ‘accelerate’ isn’t even the right word to describe it— per subscriber have jumped from 11.7 to 20.7 over the same
COVID-19 just made it happen. ... time frame.
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 14Peloton Connected Fitness Subscription Metrics ■ It’s also noteworthy that Amazon unveiled its Halo fitness
Worldwide, Q2 2019-Q1 2021 band in August 2020, while Google’s proposed acquisition
1,334 of Fitbit awaits regulatory approval. Though currently
lacking the digital fitness assets of the other four, don’t
1,091 be surprised if either makes more aggressive moves into
the space.
886
All of these brands recognize that health and fitness is a
712
megatrend, and the pandemic has fundamentally reoriented
563
511 consumers’ expectations around how, when, and where they
457
362 pursue fitness activities.
24.7
17.7
20.7 According to an April 2020 survey from The Harris Poll, 64%
13.9 12.6
9.2 12.0 11.2 of digital fitness subscribers said they intend to maintain
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 their subscriptions post-pandemic vs. 22% who expected to
2019 2020 2021
discontinue. If anything, the likelihood of retention has only
Connected fitness subscriptions* (thousands)
Monthly workouts per subscription**
grown, given that we are much deeper into the pandemic
Note: *person/household or commercial property that has paid for a Peloton subscription,
and new habits have had time to stick.
including paused subscriptions; **total workouts completed in the quarter divided by the
average number of connected fitness subscriptions in each month, divided by three months
Source: Peloton company reports, Nov 5, 2020
261670 eMarketer | InsiderIntelligence.com
Digital Service Subscriptions that US Adults Plan to
Keep vs. Discontinue After the Coronavirus Pandemic
Ends, by Type, April 2020
This stands in stark contrast to the conventional notion of
% of respondents in each group
home fitness equipment eventually becoming expensive
Music
laundry racks. For Peloton subscribers, it seems the
72% 14% 13%
more they use the service, the more they like it. The live
Exercise/fitness/wellness
and on-demand fitness classes bring workout intensity,
64% 22% 14%
engagement, and community into the home—all the benefits
News
of being at a workout class minus the inconvenience of 58% 34% 8%
getting there. The fully integrated media and hardware
Digital learning
experience looks like a big unlock in consumer behavior, and 54% 32% 14%
one that will transform the fitness market.
Keep Discontinue Don't know
It’s perhaps not surprising to see other aspirational brands Note: ages 18+ who subscribed to each service listed since early March
2020; includes free trials and paid subscriptions; numbers may not add up
join the party—albeit from slightly different angles. to 100% due to rounding
Source: The Harris Poll as cited in blog post, May 19, 2020
256389 www.eMarketer.com
■ In June, athleisure giant Lululemon announced a splashy
$500 million acquisition of Mirror, a home fitness digital The fitness experience used to be dominated by health
media and equipment brand, giving it comparable assets clubs. In a post-pandemic world, the connected fitness
to Peloton. experience will become the new focal point, and it will
become clear why Nike, Lululemon, Peloton, and Apple own
■ In July, Nike announced that it was making its Nike
that future.
Training Club app free permanently, expanding its
addressable market of digital fitness consumers.
■ In September, Apple unveiled Fitness+, a subscription
digital fitness service that costs $9.99 per month, or
$79.99 per year, and integrates with the Apple Watch
hardware and Apple Health software for personalized
fitness tracking.
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 15No. 8: Next-Gen Marketplaces buyers, creating a virtuous cycle. With stiff competition from
Amazon, the only possibility for scaling a next-generation
Will Leverage the Economics of retail marketplace is through differentiation.
Scarcity to Forge New Flywheels
Etsy found a niche with specialty homemade gifts that
Online marketplaces have proven to be among the tapped into a previously disaggregated supply side
most profitable retail business models, as Amazon and of amateur craftspeople. When the pandemic drove
skyrocketing demand for masks, Etsy was the primary
eBay can attest. While those two were the primary
beneficiary. In Q2 2020, mask sales reached $346 million,
players in ecommerce for a long time, the next crop of representing about 13% of sales on the platform. When
marketplaces are now carving out their segments of existing product supply suddenly couldn’t match the
the market. overnight surge in demand, Etsy sellers stepped up and
delivered product. This brought a flood of new buyers to the
In fact, most of the top ecommerce companies (as measured platform for the first time, including 4 million who came to
by retail ecommerce sales) now have marketplace models Etsy to buy masks alone.
driving at least a portion of their business. No. 6 Best Buy
and No. 8 Wayfair have vertical marketplaces for their Product scarcity concentrated demand on Etsy, which in
respective categories: consumer electronics and home turn drove supply. According to Marketplace Pulse, the
furnishings. (Best Buy’s third-party marketplace is only in number of new Etsy sellers has surged since the beginning
Canada.) No. 2 Walmart, No. 7 Target, and No. 9 Kroger are of the pandemic. From April 2019 through March 2020, that
actively expanding their marketplace efforts. number averaged 87,453 per month. In April 2020, it jumped
to 131,200 and steadily climbed to 208,222 in October. This
momentum segued right into the 2020 holiday ecommerce
US Top 10 Retailers, Ranked by Retail Ecommerce
Sales, 2020 season—a time of year where Etsy already shines—allowing
billions, % change, and % of total retail ecommerce sales it to capitalize on a more active and vibrant community of
Retail % % of total retail buyers and sellers that will help accelerate its long-term
ecommerce sales change ecommerce sales
growth trajectory.
1. Amazon $309.58 39.1% 39.0%
2. Walmart $46.20 65.4% 5.8%
3. eBay $38.80 26.2% 4.9% New Etsy Sellers Worldwide, by Month,
4. Apple $27.51 32.3% 3.5% Aug 2019-Oct 2020
5. The Home Depot $16.71 71.2% 2.1%
6. Best Buy $15.70 105.5% 2.0% Aug 2019 82,760
7. Target $13.82 103.5% 1.7% Sep 2019 87,760
8. Wayfair $11.66 51.0% 1.5% Oct 2019 93,011
9. The Kroger Co. $11.28 79.2% 1.4%
Nov 2019 98,305
10. Costco Wholesale $11.18 60.3% 1.4%
Note: represents the gross value of products or services sold via the Dec 2019 88,022
internet (browser or app), regardless of the method of payment or
fulfillment; excludes travel and event tickets Jan 2020 99,509
Source: eMarketer, Oct 2020
Feb 2020 88,827
259403 www.eMarketer.com
March 2020 92,511
“The simplistic framework for marketplaces is price,
April 2020 131,200
selection, and experience,” said Guru Hariharan, CEO of
May 2020 166,815
CommerceIQ. “It’s hard to disrupt on price, which leaves you
with experience and selection. What are you selling that’s June 2020 170,079
unique, and what experience can you provide that’s unique in July 2020 191,092
order to differentiate?” Aug 2020 196,555
Sep 2020 195,520
Marketplaces are two-sided platforms requiring buyers
Oct 2020 208,222
(the demand side) and sellers (the supply side) to come
together. The challenge is jump-starting the network effect, Source: Marketplace Pulse, Nov 17, 2020
wherein more buyers attract more sellers, which attract more 261231 eMarketer | InsiderIntelligence.com
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 16Nike’s marketplace strategy is interesting. The brand US Nike Mobile Unique Visitors, by Mobile App
famously resisted selling on Amazon for years only to reverse Type, Aug 2019-Oct 2020
course in 2017. Following a two-year pilot, Nike once again millions
reversed course and pulled out of Amazon entirely in late 3,235
2019. According to Profitero, since leaving Amazon, Nike’s
search frequency ranking on the platform has dropped from 2,565 2,548 2,611
No. 117 the week prior to leaving Amazon to No. 266 for 2,275
2,241
the same week in 2020. Presumably, that demand is now
1,906 1,937 2,267 2,226
flowing toward Nike’s direct-selling channels.
2,038
1,546
1,455 1,749
“Some brands like Nike can make a choice to give up 1,544 1,336 1,332
1,197 1,196
short-term revenues that some marketplaces [like Amazon] 1,410 1,113 1,117
1,081
would guarantee them in exchange for long-term vision that 792 788 754 1307 1,111
706 695 687 484 704
values the brand more,” said Juozas Kaziukėnas, founder 1030 961 887
577 546
712 707
and CEO of Marketplace Pulse. “Amazon was never and is 663
538 548
613 564
437 472 469 463
unlikely to become a channel to communicate brands’ value. 268 317 351 334
202 197
It is built to be quite the opposite—to surface products as 128
43
175 106 141
solutions to the customer’s search query, regardless of what Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
brand they come from.” 2019 2020
Nike Nike+ Run Club Nike+ Training Club Nike SNKRS
Nike is now reimagining its marketplace strategy. New Note: ages 18+
President and CEO John Donahoe, responsible for eBay’s Source: Comscore Inc., Nov 17, 2020
261672 eMarketer | InsiderIntelligence.com
meteoric growth from 2008 to 2015, understands well the
benefits and pitfalls of marketplaces. Nike’s marketplace “There are more brands that can do what Nike did,”
approach puts digital at the center while tightly controlling Kaziukėnas said. “But it is near impossible for marketplaces
the experience and limiting retail partners, allowing it to or retailers to be different things for different people.
maintain brand integrity and control the levers of demand. Consumers instead seem to gravitate to specific retailers
or marketplaces that fit them or the category. Brands are
The recent rise of secondhand apparel and footwear increasingly aware of which of those fit them, too.”
marketplaces—from Poshmark and ThredUp to StockX
and GOAT—threatens this control. Nike’s answer to that is That’s why marketplaces are evolving from scale toward
SNKRS, an app for exclusive sneaker drops that’s a favorite nichification. Next-generation marketplaces like NTWRK
among the growing community of “sneakerheads,” where it also illustrate how depth of community engagement and
owns the experience. SNKRS isn’t a third-party marketplace exclusivity drives sales. The online marketplace—which
but uses similar mechanics of scarcity and product hosts limited-edition product drops and virtual festivals for
differentiation to drive demand. the creator community of musicians, artists, and designers—
works because of smaller networks of intense fans.
According to Comscore, the pandemic has accelerated
the growth of SNKRS, in addition to Nike’s entire family of “There’s a narrative around the product, a limited time
apps, which includes Nike retail, Nike+ Training Club, and window—and that ephemeral nature is important,” said
Nike+ Run Club. SNKRS has seen traffic surge 71% from Moksha Fitzgibbons, president of NTWRK. “And it doesn’t
the seven months leading up to the pandemic to the seven have to be 300 units in terms of scarcity, but it does
months since the pandemic, from an average of 565,000 have to have some highly desirable qualifier to it. Those
unique visitors from September 2019 to March 2020 to an three value propositions drive a lot of consumer demand
average of 965,000 unique visitors from April 2020 through and purchasing.”
October 2020.
Concentrating demand around a narrow window leads to
high conversion rates and second-order branding effects,
especially as the events—and participants’ exclusive
hauls—amplify across social media. The flywheel effect has
taken hold.
PRESENTED BY: Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 17You can also read
