Coming off the largest year-over-year spike in e-commerce sales ever recorded, online sales are a growing and integral part of overall retail for businesses. According to data from DigitalCommerce360, a trade publication covering the space, U.S. sellers raked in $861.12 billion from consumers in 2020, up 44.0% year over year.
Often used as guideposts for the direction of the e-commerce space, the top five technology companies Facebook, Amazon, Apple, Microsoft and Google (often referred to en bloc as FAAMG) all experienced some changes to their retail strategies amid the pandemic, which are continuing into 2021.
Microsoft, for example, abandoned its brick and mortar operations in 2020, ahead of its reportedly already planned pull-out in 2021, while this year Apple looks to find a happy medium between its physical store sales and e-commerce strategy as lockdowns subside.
Read on for more insights into how the big five tech companies are approaching e-commerce in 2021.
Social media giant Facebook continues to strive to be the go-to platform for e-commerce. In 2016, the company introduced Facebook Marketplace to serve as a space where users can buy and sell goods directly through the network. A year earlier, it had conducted a survey in which it found that nearly half of people come to Facebook to actively look for products.
In 2020, Facebook expanded its online shopping experience to also offer Shops, which allows sellers to create digital storefronts on both Facebook and Instagram. The move was serious as the company also announced partnerships with leading e-commerce companies like Shopify, BigCommerce, Woo, Channel Advisor, CedCommerce, Cafe24, Tienda Nube and Feedonomics, to allow users to manage their shops via these platforms.
The play comes as Facebook’s cash cow, advertising, is increasingly coming under risk because of criticisms surrounding the tracking of user data. Last April, Apple released updates to its iPhone operating system that give users more control over how and by whom their data is used.
The social media giant may be trying to curb its dependence on outside companies like Apple by encouraging more sales through its own apps.
Amazon continues to be the e-commerce juggernaut to be reckoned with in the space. Of the over $860 billion in e-commerce sales for U.S. companies in 2020, Amazon pulled in $386.1 billion of it, up from $280.5 billion in 2019.
But while Amazon saw record-breaking sales, so too did competitors such as Walmart.com and Target.com, resulting in a market share decrease of 13% for the Seattle-based corporation. Going forward in 2021, Amazon will look to ward off its competitors as much as possible.
While continuing to expand its vast marketplace of goods will be integral to staving off competitors, Amazon will also double down on other aspects of the company that add value to customers, including subscriptions.
Amazon Prime, with its sub-categories like Prime Video, Prime Reading, Prime Wardrobe, and grocery service Amazon Fresh, come together to glue customers to the company for nearly all their shopping and entertainment needs. Not to mention its flagship IoT device Alexa providing a super-convenient method for customers to shop at any time from home with simple voice commands.
Famous not just for its advanced technology, but perhaps more so for its design prowess, Apple has influenced the look and feel of everything from computers to telephones to storefronts. Its innovative Apple Stores launched in 2001 and changed the retail space forever.
In 2020, pandemic-related lockdowns forced the temporary closures of Apple Stores across the globe. While CEO Tim Cook told stakeholders that the first months of the pandemic hit hard, he also said that revenue from e-commerce helped maintain growth during lockdowns. The Cupertino, California company unrolled contact-less delivery as well as an online portal for sales and device support from its famous Genius Bar.
With the pandemic easing, Apple announced in March that all of its U.S. retail locations were back open for business. Despite the company‘s planned expansion of its physical store presence, look for Apple to find a happy medium between brick and mortar and online sales in the future.
Contrary to Apple’s positive outlook for its physical store sales, Microsoft abandoned all brick and mortar locations permanently during the pandemic. This wasn’t necessarily a surprise as the company hadn’t traditionally relied heavily on its own stores for sales.
Microsoft sells its software through a variety of direct and indirect sales channels, including its own digital marketplaces and online stores, as well as those run by its channel partners and technology distributors.
Moving ahead, Microsoft will continue to position itself as a leading B2B software marketplace and commerce platform, providing direct commerce capabilities to independent software vendors (ISVs) via its marketplaces AppSource and Azure Marketplace.
Providing the tools necessary for others to sell related products in the Microsoft ecosystem will be a cornerstone of the company’s online sales growth.
In May, Google’s President of Commerce and Payments Bill Ready announced an enterprising plan to build out and support a “free and open commerce ecosystem.” The move would help Google take on Amazon head-on and is backed by a partnership with online shopping platform Shopify.
As part of the announcement, the company reintroduced free listings on its Google Shopping platform, which allows for listings from big box retailers all the way down to mom and pop operations. Free listings were originally introduced amid the pandemic.
Similar to Facebook — and Microsoft in the B2B space — Google Shopping aims to become the go-to platform for buying products online, and hopes to attract its over one billion active monthly users on its search engine to the shopping experience.
As companies reemerge from over a year of disruption they’ll be looking for guidance on how to approach e-commerce in the years ahead. It’s helpful to look to the corporations that are leading the way for inspiration and insight.
One of those companies is Adobe and its Magento platform, which is the most flexible engine in e-commerce. It’s an out-of-the-box, highly extendable, and feature-rich platform that can offer a uniquely engaging experience for your business.
For more information on building an e-commerce strategy that’s right for your company, please visit taloscommerce.com.