Around the world, Black Friday and Cyber Monday sales dropped for the first time ever – but SAP Commerce Cloud customers wouldn’t know about that, as they enjoyed tremendous year-over-year growth of 2021 holiday e-commerce stats amid Cyber Week.
This year retail customers had a flying start, enjoying an upward trajectory through the end of October, with a 62% growth in order volume recorded.
Despite skepticism that such a trend could continue, Singles’ Day proved the doubters wrong.
Then the real fun started… but first, a recap of how we got here.
SAP customers generate 87% of total global commerce. Source: IDC Review of SAP “Best Run Intelligence” Methodology
It was interesting to see how vaccination, stay-at-home orders, and income support impacted B2B and B2C in 2020. In the fourth quarter of 2020, the market saw an impressive uptick in digital commerce across industries in general, including retail.
A drastic change in consumer behavior was evident. As economies were being reopened, increased in-store traffic was one of the highlights – turned out people missed being out and about – so much so that they happily engaged with activities they previously loathed.
As countless retailers shutter their physical locations, Sephora is expanding. Learn the brick and mortar retail trends that are contributing to their success.
With the rise of vaccinations across the globe, economic activities started to gradually resume earlier in 2021.
The pandemic forced businesses to focus on areas where improvements were due. Perceived purpose of companies and their products were either re-discovered or re-aligned with the reality and potential paradigm shift of the future.
Some took this opportunity to focus on innovation or streamlining processes.
Find out how B2B industries like manufacturing and high tech transformed amid the pandemic. Manufacturers had an important realization: Your buying experience should be simple, even if your products aren’t. This is a valuable takeaway for every industry.
99 of the 100 largest companies in the world are SAP customers. Source: IDC Review of SAP “Best Run Intelligence” Methodology
Increased demands of goods propelled by income support in specific countries further stretched the global supply chain while it was on a course to recovery from a significant disruption.
Empty aisles in-store and a surge of “out of stock” messages online have been an ongoing merchandisers’ nightmare throughout 2021.
Customer service trends in 2022: More companies will make service a priority to drive growth, customer loyalty, and C-suite strategies.
Overall weaker growth and higher inflation coupled with ongoing supply chain issues drove promotions without deep discounts, unlike previous years. Some businesses had to switch from offshoring to onshoring. We’ve also seen the adoption of friend-shoring via geopolitical leverage.
The question remains as to whether these models are sustainable in the long run – just last month, Reuters reported that some retail giants chartered ships themselves to alleviate the supply crisis.
Supply chain woes threaten to spoil the holiday shopping season with higher prices, more out-of-stock items, and delayed shipments.
Consumers are also adapting to this new normal as well. Unlike any other year, the lack of massive markdowns or deep discounts drove consumers to purchase what was relevant to them.
When analyzing the performance of retailers on SAP Commerce Cloud this year, a peak in Gross Merchandise Volume (GMV) was evident in the month of July. In contrast, a similar trajectory occurred in August of last year. Calculating all GMV from the beginning of the year up to October, 23% of the volume was in July, which was driven by almost 3x higher Average Order Value (AOV) than the regular monthly average of 2021. Order volume started to pick up in August with lower AOV.
It’s clear that online shoppers wanted to be ready for the holidays ahead of time to avoid fulfillment delays.
Increased utilization of Buy Now Pay Later (BNPL) also contributed to the growth in retail orders. A recent study shows a 48% growth in BNPL usage among American shoppers online. It’s mainly driven by the need for cash conservation during the pandemic and beyond.
Almost all major retailers now have a BNPL option available that positively impacts AOV in general.
How do Gen Zers, millennials, and boomers compare when it comes to generational payment methods? New data reveals intriguing insights that can help you provide smarter payment experiences.
Although Black Friday deals started early this year – we saw an uptick starting Thursday – GMV had a double-digit growth the previous day.
On Black Friday, order volume was soaring – 143% higher, and the GMV was 98% higher than the regular daily average. Compared with last year’s Black Friday, order volume grew by 66% and GMV by 4%.
We analyzed B2C performance, excluding retail from the mix, since retail performance was being examined separately, and B2C businesses usually leverage the Black Friday – Cyber Monday weekend to boost their revenue. The numbers were quite impressive.
All indicators – order volume, GMV, and AOV had significant growth on Black Friday. How much growth? Compared to an average day:
Black Friday 2020 vs. Black Friday 2021: Order volume was 68% higher, GMV was 426% higher, and AOV was 213% higher in 2021, mainly driven by high-tech.
High-tech (B2C only) registered 64% of the GMV of this year’s Black Friday. High-tech B2C order volume on Black Friday was 435% higher, GMV 544% higher, and AOV 20% higher than last year’s Black Friday.
Retail’s double-digit growth in orders continued beyond Cyber Monday, with order volume 62% higher, and GMV 50% higher than the regular day.
Whether there would be further disruption in the supply chain, people’s mobility, or change in spending behavior, it’s evident that retail is on course to have a solid close this year, and exciting growth in the high tech industry is something to watch as well.
