4 of the Top Challenges for E-commerce Last Year

Challenges for E-Commerce
Challenges for E-Commerce

Although 2020 gave e-commerce and retail brands no other choice than to be quick and adaptable, 2021 offers a glimmer of hope for normalcy. Last year, shopping shifted to almost exclusively online due to coronavirus. Now, instead of being reactive to changes in consumer behavior, brands can be proactive and pursue new opportunities. Late last year, we shared strategies for success in 2021 on the Marketplace Strategy blog. But it’s also important to reflect on the past 12 months and apply learnings as we move forward. Continue reading for an overview of the top challenges for e-commerce in 2020.

The Transition from Retail to E-commerce

In early 2020, before the coronavirus became a global pandemic, we spoke with our clients about the next phase of growth for the industry. It was inevitable that more legacy retail brands would begin to transition to e-commerce or at least invest in an online presence. This meant we could expect competition on Amazon and other marketplaces to intensify. 

Then, because of COVID-19, e-commerce grew faster than we could have anticipated. Not only did the number of brands and retailers selling online increase, but shopper traffic also grew astronomically. In response, clients originally considering testing Walmart.com or another marketplace in addition to Amazon quickly embraced new channels.

Unusual Product Launch Timelines 

What was already planned for 2020 mostly became obsolete for many brands come March. When the landscape changed overnight, teams had to reassess and make immediate adjustments. There were plenty of challenges such as supply chain constraints and shipping and production delays to name a few. But, at the same time, brands were pressured to meet increased demand from consumers. 

Each client was in a unique situation. Some needed to drastically increase or decrease production while others had to unexpectedly add brand new products to their catalogs. And, in some cases, brands accelerated product launches planned for later in the year to take advantage of the new increase in traffic. Regardless of what a client was facing, there was no time to waste as circumstances were extreme and bound to change at any moment.

A Spotlight on Inventory Management Especially in Q4 

Fulfillment, regardless of which e-commerce platform a brand was selling on, became an obstacle. First, product inventory forecasting was off due to the changes to standard peak seasons and increased demand. For example, Prime Day was postponed and took place shortly before the holiday season. With this, brands couldn’t allocate inventory across multiple channels as they would have normally. Instead, they had to identify what was attainable and would drive the most return in the short- and long-term.    

Then, aside from changes to peak seasons, low inventory and supply chain constraints were still widespread. Warehouses were backed up and understaffed making replenishing inventory almost impossible. At MPS, we had to take what we learned during the early days of the pandemic to better allocate inventory during Q4. Many of our clients were faced with the choice of focusing on either Prime Day or the Black Friday and Cyber Monday weekend. In some cases, there simply wasn’t enough budget or inventory to take advantage of both.

The Need for Incremental Ad Budgets 

The pandemic placed sudden and significant stress on budgets. However, investing in advertising became more important than ever. Some reasons for this include the immediate spike in traffic and the trend of traditional media dollars shifting to online. Because of these rapid changes, selling online became more competitive and involved for brands while being necessary for their businesses to survive. 

Dating back to March, MPS began having conversations with clients about why incremental budget was crucial. We were then able to prove why spending now would outweigh the risks of having to potentially dial back spending later in the year. The coronavirus put a spotlight on brands and their ability to identify and prioritize the needs of consumers. Brands that were unable or chose not to increase advertising spend risked becoming irrelevant.

Final Thoughts

Looking back at what e-commerce and retail overcame in 2020, we believe this industry will not only continue to persevere but succeed. With the countless number of lessons brands learned, if they’re considered and applied moving forward, the future is bright. 

If you could use the support of a strategic partner, schedule a free consultation. And, as always, we’re here to answer any questions about your brand’s presence on Amazon and other marketplaces. Finally, should you be interested in learning more about the results our clients experience through a partnership with MPS, check out these resources.

Challenges for E-Commerce
Hannah West Dalpiaz

Hannah West Dalpiaz