#3 Product Search: GAME OVER. Product Development: LEVEL 1.
Top-5 eCommerce Trends. How product management will change for sellers in 2021.
2020 was a year of lockdown for the population of Earth. Sorry for repeating, but this is the most remarkable point about the past year for most people, except… eCommerce business.
Top online retailers were facing a booming growth and expansion instead of lockdown. They had to deal with a rapidly changing environment and learned to react promptly. 2020 was a year of transformation for major online stores in the US, and we will definitely see it in practical realization soon in 2021.
For Amazon sellers and Private Labels, it is a critical time to understand what to expect in 2021 onwards and start redirecting themselves towards industry dynamics. As a consumer products expert, I’m curious about what will change:
- for product management in eComm business
- in the attitude of Private Label owners about product development capabilities.
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❓What are the major eCommerce trends to take into account?
I don’t have a crystal ball, of course, but average analytical skills would be enough here to understand the main scenarios :-) Searching in 2020 year-end reports, analytics, and predictions from industry influencers (relied a lot on Jungle Scout and Helium 10 folks), and I could quickly identify three significant areas boldly noticed by all experts.
☝️ 3 prime trends in eCommerce (United States)
📈 Trend 1: Rise of Walmart
Walmart stepped in the competition with Amazon, opening in Q1’ 2020 their online platform for third-party sellers, and likely to focus on building this direction in 2021. The retail giant is learning to be agile in eCommerce, partnering with Shopify.
2021 we may expect booming growth of sellers who will fill a less saturated marketplace, innovative product categories (Shopify legacy...), new in-store pick-up services, and delivery acceleration to 1-2 days from order to porch.
40% vs. 5% - Amazon and Walmart share in eCommerce likely to look differently by the end of 2021.
📈 Trend 2: Step-change in visual content quality
High-quality media becomes a necessary attribute of product success (12 perfect images on a white background are no longer enough). Content must resonate with a client and deliver the right product messages. Product visuals become a place for creativity competition.
In 2020, Amazon launched video features for product advertisement, which will become an industry-standard soon.
Interesting to see new content requirements set with the upcoming Amazon Posts (beta) - a new social media platform to promote products and deliver brand messages.
📈 Trend 3: Push for building strong eComm Brands
Amazon is leading the way, developing future partners who will share the same core value - customer satisfaction. Amazon does it in 3 ways:
➡️ moving towards “Pay to Play.” As well-captured by Kevin King from Helium 10 - “we will see less organic listings on page 1”. Even paid ads will get to significant competition.
➡️ giving more advertising capabilities to registered brands - e.g., Product Video and Posts will fully function for Amazon Brand Registry, only.
➡️ taking less care about private sellers. Do you remember Mr. Bezos on the court in ~June ‘20 for claims of boxing out small businesses? Do you see growing complaints about product hijacking? Guess what Amazon is going to do about this? - right, establish full protection for registered Brands, only.
Reasonably, Amazon wants working with partners able to pay high fees and provide high-quality service to buyers. Amazon selling is not an amateur hobby anymore - it is a big professional business game.
Brand development is my favorite trend. A fantastic conclusion made by Greg Mercer (CEO of Jungle Scout), who said about customer reviews: “Social Proof may supersede brand preference. ...Smaller brands can emerge on Amazon and stir up the competition, squashing the idea of traditional brand loyalty.”
It means building eComm brands is different from the traditional approach. Branding based on social loyalty becomes the signature element for businesses oriented in digital channels. It takes effort. However, the era of Social Media keeps the opportunity open to all entrepreneurs!
BTW, were you aware that Amazon is growing a bunch of their brands?..
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Interestingly, there are few other topics with an extensive range of opinions. Many experts highlighted them from various perspectives, giving completely different recommendations.
☝️ 2 hottest debates.
🔥 Topic 1: Best fulfillment option
2020 demanded creativity in re-arranging product delivery approaches. Have you ever imagined an option of “curbside pickup”? Three months later, this is a standard service for all retailers and restaurants.
In eCommerce, opinions vary:
➡️ “...2021 a year of FBM.”
➡️ “...1-2 day FBA is the way to win 2021.”
➡️ in-store pick-up will grow in 2021
➡️ Consumers will permanently switch to online shopping
➡️ post-COVID buyers are demanding both online and on-shelf product availability
![Transpo_PrimeDelivery_Cityscape_1[1].jpg](https://images.squarespace-cdn.com/content/v1/5f976de30b0a254bb63c7435/1610518171098-J98JNREQ1MXU1RKVUJ6N/Transpo_PrimeDelivery_Cityscape_1%5B1%5D.jpg)
Opinions are contradicting each other, so which scenario to choose for your business? Lucky you if the product niche is dictating the only fulfillment approach.
For most Private Labels, 2021 may bring experimentation with three significant options: FBA, FBM, and in-store, on different platforms.
🔥 Topic 2: Amazon selling as a popular career path
I love this discussion! Of course, making eCommerce a full-time job becomes more and more popular. Amazon increased by about 1 million new seller accounts in 2020 and kept growing. Walmart is likely to explode in 2021.
A career in Amazon selling needs competencies, skills, and knowledge. Product and Keyword search are fundamentals and remain actual now. There is no lack of assistance here - the entire infrastructure is available for years. The question is - which new competencies need development to stay relevant in this business? Options are:
Marketing
Social Media
Financial Planning
Logistics and Supply chain
...
The choice appears a hard one.
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So what?
If this is the only question you have when read by this point, eComm selling likely is your hobby along with a day job. And it’s not a problem if you stop doing this later in 2021 or 2022.
But if the goal is to build a long-lasting business, I would reframe this question.
❓ What I need to do differently starting 2021?
Combining the latest industry reports and years of experience in product development, I’ve got a few conclusions. Private Labels would need to consider three main changes moving on:
💵 Free-up additional resources to re-invest in business growth - through product cost, value, and profit optimization.
Future eComm will require a significant resource for content making and promotion in social. Highly profitable products (35-40% margin) can only win in the competition. The help may come from the optimization of the supply chain - production and delivery. Getting what the factory produces typically is not enough - it's time for sellers to start co-developing necessary optimizations with the manufacturer.
🔐 Secure the business - through building a Digital Brand
Companies from China will continue dominating Amazon, using controversial methods sometimes. Building a digital brand will let private labels apply for hijacking protection and move from price competition to value and social loyalty competition - this is a clear advantage of US and EU companies.
Building a brand would generally require a consequent completion of 4 stages: Profitable product, Consistent quality, Social Media Influence, Process to scale success.
With budget questions - go one point up.
🧱 Sustain the business for a long run - through applying new fundamental skills
I do not want to disregard all the competencies mentioned earlier - all are important. But there is one fundamental competency that enables the rest - Agile Product Management.
eCommerce businesses can learn a lot from the Technology industry. Launching a product on Amazon soon may look similar to launching a start-up in Silicon Valley. Below are the core elements of Agile Product Management to consider for digital brands:
➡️ Product lifecycle management (launch, adaptation, retirement)
➡️ Product Portfolio Management (product changes and portfolio synergy)
➡️ Agile Product Development (ideation, rapid prototyping, lean implementation - physical products and digital infrastructure)
➡️ Agile Project Management (Kanban, or Scrum sprints to execute new projects)
➡️ Product Manager formal roles to own product life cycle and run sprints.
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Started as an excellent platform for individual entrepreneurs, eCommerce grew up into a tricky business in the last decade and now demanding new skills and solutions. An exciting transformation is going on from "product search" to "product & brand development." More interesting challenges are coming up! 😀
Want to learn more?
Look here: 2020 Consumer Trends Report by “Jungle Scout”
https://www.junglescout.com/consumer-trends/
Here: 2021 Predictions by Helium 10:
https://www.youtube.com/c/Helium10/playlists
And here: 2021 Predictions by Greg Mercer, CEO “Jungle Scout”:
Sincerely
