According to the data, the “new normal” in e-commerce can be summed up in three words: “business is booming.”
Daily online sales jumped 49 percent from March to April, according to The Adobe Digital Economy Index, which measures transactions from 80 of the top 100 retailers in the United States. During that same period, a surge in online grocery shopping has reportedly increased Instacart’s valuation by 50 percent, with investors pegging the company’s worth between $12 and $14 billion. E-commerce heavyweights Amazon and Shopify also posted strong first quarters, with Amazon raking in $10,000 per second and Shopify reporting a 47 percent increase in sales.
Of course, sales figures and quarterly earnings reports don’t indicate what’s happening behind the scenes. Yes, more people are shopping online, but to achieve these sales, companies have had to rethink everything from their search algorithms to their stock and how fulfillment teams operate. E-commerce leaders say their companies must be agile and customer-focused.
Built In recently spoke with senior tech leaders at Etsy, TechStyle and Zulily about the new normal in e-commerce and the impact of the industry’s sudden industry shift — along with the changes they anticipate are still to come.
Mike Fisher, CTO at Etsy
What does the “new normal” in e-commerce look like?
Consumers are increasingly reliant on e-commerce, especially for essential goods and services. At a time when e-tailers are facing supply and fulfillment challenges, Etsy’s business model and the dynamism of our sellers and team have helped us quickly meet surging consumer demand. Even before the pandemic, data science and machine learning were already transforming the way we shop online. Since we invested steadily in developing sophisticated search algorithms, Etsy was already on track to actualizing this “new normal” that we suddenly find ourselves in.
Practically overnight, shoppers have come to see Etsy as not just a go-to for unique items, but also a critical resource for everyday essentials. With over 60 million items on our platform, Etsy has the infrastructure to leverage big data to efficiently deliver the most in-demand items.
How has Etsy adjusted to this new normal, and what likely changes will the second half of the year bring?
The agility of the Etsy platform and our engineers enables us to stand out among retailers and other e-commerce leaders during this time. When we saw a sudden surge in demand for essential items like face masks, we made several changes nearly overnight to ensure we could meet our buyers’ needs. For example, we retrained our algorithms to account for what we call the “semantic gap” between previous searches for Halloween masks or facial creams and the new meaning of “face mask.” Processing this nuance dramatically improved the quality of our search results, and it’s this granular level of interaction that’s helped Etsy pivot with changing consumer preferences and respond practically in real time.
Moving forward, our continued investment in search improvements and a holistic understanding of our inventory will help us connect buyers and sellers during both seasonal fluctuations and even the most unexpected changes in consumer behavior.
Meera Bhatia, President of Expert Services at TechStyle
What does the “new normal” in e-commerce look like?
Retail has been one of the most disrupted industries over the past two decades, and the COVID-19 pandemic has accelerated those changes. It’s forced companies to make drastic decisions to keep basic operations intact. Businesses that are laser-focused on data and understanding their customers will be the ones that succeed because this data helps identify inefficiencies across all business operations.
TechStyle was founded on this premise, which is why we’re committed to a digital-first approach to launching and scaling brands. We reimagined every aspect of the fashion business to drive growth during a challenging time, from developing our own back-end technology to operating a vertically integrated supply chain. Thankfully, these efforts are paying off. While we are certainly impacted by the economic slowdown, becoming more efficient across our business units from day one has allowed us to continue serving customers and avoid making any layoffs.
How has TechStyle adjusted to this new normal, and what likely changes will the second half of the year bring?
Our guiding principle is to always challenge the status quo, and I am incredibly proud of how our leadership teams brought that mentality to this global crisis. For instance, when our retail team faced state mandates requiring the closure of all 40 Fabletics stores, our first concern was protecting the livelihood of our more than 700 retail associates and avoiding layoffs or furloughs. Our retail leadership quickly mobilized to enable work-from-home for our store associates, utilizing their expertise and passion to support other business units, like our global member services, which have seen a spike in demand.
We were one of the first companies to mobilize our member service agents across the globe to work from home and also make rapid adjustments within distribution centers to ensure the health of our workers while continuing to ship packages. The agility of our brand teams also came into the spotlight as we developed new content for our members impacted by stay-at-home orders and launched new collections that support COVID-19 relief efforts. While we anticipate 2020 will challenge us in unprecedented ways, we’re confident our nimble culture will enable us to maintain continuity across our brands.
Michael Starbird, Director of Product Management at Zulily
What does the “new normal” in e-commerce look like?
What sets Zulily apart from other e-commerce companies is our business model, which is all about giving shoppers incredible value on everything from apparel to toys and pet gear. Our online store is entirely new every day: We launch thousands of new products each morning that are typically live for 72 hours. Because we don’t actually purchase products from brands until our customers do, we can be far more nimble than other retailers. This model has always encouraged a spirit of agility at Zulily, which is now going to be the new normal in e-commerce as trends and customer needs continue to evolve.
For example, in a matter of days, team members from technology, merchandising, marketing, and more set up a “Stay at Home Shop” with curated crafts, games, fitness and wellness products, kitchen tools, and more. We’ve seen great engagement from customers so far and look forward to offering more experiences to help families through the summer and beyond.
How has Zulily adjusted to this new normal, and what likely changes will the second half of the year bring?
In March, our team brainstormed across departments, and worked backward from our customers’ unique circumstances — both then and in the months to come. We really challenged ourselves to lean into value and preempt their needs. We keep a close pulse on what our shoppers want and constantly test new merchandise, app features, designs, and more, doing impactful work no matter your department or role.
In the second half of this year, we’re focused on earning our customers’ trust and maximizing value. We’re making numerous efforts to improve reliability on our site and apps, while helping customers save money. We are also focused on listening and showing appreciation to customers who choose Zulily.
At the same time, it’s important to ensure everyone on the team feels supported. Zulily is encouraging flexibility and open communication as we all work from home, setting teams up to do their best work. A culture that emphasizes curiosity and empathy is key, not just for 2020, but for the entire online retail industry moving forward.
All responses have been edited for length and clarity.
