A little over a year ago, around this time, we were just beginning to settle into our new reality; one that no one could have seen coming except for those who religiously watch apocalyptic movies. Pandemic lockdown life was real and everyone in the world had to adjust to containing their entire lives to their apartments and homes. Whether or not we’ve driven ourselves, our roommates, and our loved ones crazy in confinement is speculative, but one thing’s for sure: We sure did our best to keep ourselves entertained.
If there’s been one e-commerce lesson learned throughout the lockdown, it’s that shopping doesn’t disappear in difficult times. It just becomes digital. And if the metrics we’ve seen from Q4 2020 to Q1 2021 are any indication: A lot of consumers are staying home, but they’re still celebrating the joys of being able to shop whenever and wherever.
We often associate this time (January to March), with new beginnings. And without being a phenomenal cliché, I’m sure we’re all a little excited to move forward. Speaking of which, as we enter spring and the sun begins to warm the earth, fresh new trends from fashion to e-commerce are being brought to light with it. So I ask, what better time is there to look at growth and see what new life is sprouting in the world of digital shopping?
Before we dive headfirst into the newness, I felt it important to revisit the last year and talk about something that blew my freaking mind. At the height of the pandemic, 10 years of e-commerce growth happened in just 90 days. I say again, 90 days.
And although the world landscape has since changed with the rollout of vaccines, e-commerce has been and still is the economic sweet spot as both brands and consumers young and old continue to rush online. To my point, and according to CJ Affiliate, U.S. e-commerce is expected to see a 14.3% growth in 2021. Notably, there’s also a 15-30% projected growth in consumers who shop online for most verticals in 2021.
While social distancing may end shortly with the aforementioned vaccine rollout, Forbes mentions that “the psychological impact of the pandemic on consumers around the world will be permanent.” In other words, it seems like e-commerce this year will continue moving forward in ways that, pre-COVID, might’ve seemed near impossible.
On that note, let’s come back to a 2021 Retail Outlook Report by CJ Affiliate and start exploring some of those trends. Not to my surprise, there has been continued growth in high-demand and essential verticals like medicine, groceries, household supplies, personal care, and food take-out and delivery. But what was hard to ignore was some of the other emerging new year and spring-related trends.
As true to the new year as it gets, a few prominent verticals saw the growth that spoke fondly to the “new year, new me” maxim. Of those were fitness & wellness with an expected 28% growth and vitamins & supplements with an expected 27%.
When I spoke with Connor G, our Director of Analyst Operations, he said his eyes were drawn to exactly those verticals, plus food takeout and delivery. He also commented on the current of e-commerce going into this year:
“With a substantial amount of people shifting their shopping to online during the pandemic, these three verticals flourished, each seeing at least a 27% growth in customers purchasing category online. These verticals are not expected to slow down post-pandemic either, with each vertical projected to pick up an additional 11% of customers purchasing category online. I think online shopping is here to stay and will only continue to grow as we move forward. Consumers have now grown accustomed to the convenience of online shopping and brands have taken notice and adapted their business models to this with only more to come as we get into the springtime.”
Thanks for the insight, Connor. That accustomed convenience and online shopping growth is something Advertise Purple can give credence to as well, especially in the year’s first quarter. Let’s talk about some trends on our end.
Outside of the expectedly thriving essential and almost-essential verticals, trends we saw about the new year and spring were likewise within health & wellness, but also entertainment, pet and animal care, and gifts and flowers.
From Q4 2020 to Q1 2021, health & wellness saw stable growth with Q1 being the biggest revenue month for this vertical over the last year. From quarter to quarter, we saw a 16.93% increase in clicks and a modest, but impactful, 4% increase in revenue. These Q1 increases brought the vertical $9,248,684 in revenue and 1,936,832 clicks. As consistent as the vertical’s overall growth, clicks, in particular, have been moving through spring with the most distinguishable growth around New Year’s Day. Are we shocked?
“There’s no surprise that with the global pandemic, people are getting more health-conscious than ever, and I don’t see this growing demand for health & wellness products or services will slow down anytime soon. Q1 has historically been a strong quarter for the health & wellness vertical, even stronger than Q4 peak shopping season because of the New Year’s resolution element in Q1,” says Hong S, one of our health & wellness managers. “This year, similarly, despite the unusual pandemic condition, the ‘New Year, New You’ messaging remained strong and relevant to the customers. Supplement, weight loss, test kits brands have seen an extremely positive increase in both QoQ and YoY traffic and revenue.”
Operating within the health & wellness vertical in the CBD sub-vertical, Jake S mentioned the same New Year’s optimism that Hong spoke about. “It seems many consumers are looking for new health initiatives and are willing to try new products to better themselves physically or mentally,” he added. “People staying at home during the pandemic may have experienced an escalation of their anxieties and/or their existing ailments. That alone may have led to people being more open to trying new health products, like CBD.”
Moving forward, as we tend to do in spring, the entertainment vertical saw an impressive (that was too tame, let’s say whopping) 57.33% growth in revenue from Q4 2020 to Q1 2021. With the pandemic trapping us at home, it makes sense that people are seeking more entertainment in the form of online streaming, online experiences, and e-learning than ever before. But before I tailspin with my newbie analysis, I wanted to have a quick chat with Matt W, who has firsthand experience with some of our entertainment clients.
“Q1 of 2021 was an incredible quarter for many brands in the entertainment vertical, specifically for brands in the online entertainment space. February in particular saw a 214% increase in MoM revenue and a 142% increase in MoM clicks. The explosive growth in demand has resulted in strong QoQ and YoY growth for many of my brands in this vertical,” Matt remarked. “One of the main factors for the recent growth in digital entertainment can be attributed to the transition from traditional to online entertainment.”
So, the health & wellness and entertainment verticals have been flourishing it seems. But what of the gifts & flowers vertical? Well, as expected with a staple consumer holiday like Valentine’s Day, there was big Q1 growth for this vertical throughout February and at the start of March in both revenue and clicks. And of course, the start of February leading up to the holiday brought in peak numbers for each metric.
Some of the clients that did well in this vertical are personalized gifts, one-of-a-kind gifts, puzzles, and art kits. What better gifts to give than those that entertain and fill the social void we’ve sometimes felt during the lockdown?
“During this time, I’ve noticed that many consumers and publishers are looking into more personalized gifts to send to their loved ones,” says Crystal J, who works within the vertical. “We’ve seen much more emphasis on unique gifts that show love and care from a distance. I saw affiliates and publishers get ready for gifting holidays such as Mother’s Day and Father’s Day much earlier this year.”
With this growth we’ve talked about and collectively seen, it’s clear there’s been a permanent shift in e-commerce towards digital, and it doesn’t seem like it’ll be slowing down in the coming years..
Coming full circle, we started with coping with the lockdown orders a year ago. Now we adjust, shift, and move with the changes we experience. Although the vaccine is out and about and ready for eager individuals, let’s not forget the impact this time has made on retail. Just as spring encourages us to do, and no matter if we’re a brand, an affiliate, or simply a human, we’re all trying our best to embrace new beginnings. These trends are just a case in point.