How to succeed in the US ecommerce market in 2021

How to succeed in the American ecommerce market

The events of 2020 have driven a surge in ecommerce sales worldwide with no signs of slowing for years to come. The US experienced the second highest growth in online purchases after China, a reason why international brands see the United States as a business mecca. However, the market’s diverse and competitive nature means that many might not reach that American dream. A successful ecommerce strategy starts with understanding shopping behaviors and how to leverage them.

Retail ecommerce sales in US yoy

The US will continue to see an increase in ecommerce sales for years to come. Source: Statista

What you need to know about American consumers

Ecommerce businesses need to focus their attention on current US consumer profiles. The market has changed so drastically that a lot of pre-pandemic information is already outdated. So, what can we learn from consumer behaviors since March 2020?
To understand the different shopping behaviors, we can look at different generations and income levels. Though the US accounts for 29.4% of global wealth, making it the richest country in the world on this basis, it is not evenly distributed. There’s not a one-size-fits-all approach to the US, despite its overall good economic standing.
The groups leading the way in online shopping, both for essential and non-essential goods, are millennials and high-income earners across all generations. They account for 20% of the American population that are mostly unaffected by the pandemic and are still employed, likely working in a digital environment. Gen X have also increased their online shopping, but not to the same point as millenials.
Gen Z are also driving the ecommerce trend, though they are buying more non-essentials than any other groups, such as apparel, footwear, at-home entertainment, and food delivery.
People aged 65 or over are not a driving force in the ecommerce surge in any significant way.
Consumer segments of any generation that are facing more difficult financial and unemployment situations have also switched to online shopping, but predominantly for essentials and good-value-for-money items.

Best selling products per category

Essential products, such as groceries, household supplies, and personal care items, dominate ecommerce sales within all economic brackets of the US society. Leading the way for non-essential products is at-home entertainment for all generations and income levels, followed by snacks, food take-out, apparel, books/magazines, consumer electronics, non-food children's products, such as toys, and cosmetics. The key takeaway here is that products that can be used indoors are being favored over outdoor products.

ecommerce changes 2020 due to covid

Source: Statista

What factors influence shopping choices of Americans

The shopping criteria of Americans has also shifted focus. Consumers are looking for better value for the money they spend than ever before. The uncertain economic and employment situation means people are spending more frugally.
Next to prices and regular promotions, product availability and buying convenience are also factors that attract clients, to the point where they’ll swap brands they’ve potentially been loyal to for years.
In addition, health, hygiene and safety measures of how goods and food are handled by staff and delivery personnel have become more important.

How to break into the American market

Non-American companies who wish to break into the US market have to overcome many hurdles, such as complex regulations, investment requirements, tough competition, and a hugely diverse audience. On the bright side, starting an ecommerce business in the US can be a lot easier than navigating the logistical requirements needed to establish a local store.

1. Adopt a multichannel approach

A multichannel approach allows companies to be discoverable by the widest audience possible. Product catalogs need to be listed on all (or nearly all) top US online stores to achieve the desired visibility. The most visited online shops are Amazon, eBay, Walmart, Craigslist, Target, Etsy, Home Depot, Best Buy, WayFair, Macy’s, and Wish. Choosing which ones to go with depends on your brand. For example, Etsy is a platform dedicated to handmade goods and Home Depot for home improvement and gardening retail.
The ingredient for success here is a tailored approach for key audiences of all channels in order to amplify the full potential of each one. This means catering the communication style, product descriptions, and images after having analyzed client data. If done right, your customer will feel like you're reading their minds and you'll gain their loyalty.
Social commerce sales should also be the focus of any business wanting to get some traction in the US, which is projected to reach 84.2 billion US dollars in sales by 2024. The starting point of the American shopper’s online journey is often on social media, which is why being active on key channels (Facebook, Instagram, TikTok, Pinterest, etc.) that fit your brand is important to stay relevant and reach the most prospective clients.
Your social media strategy should involve sharing content that highlights your company’s products, brand identity, and corporate values (especially regarding ethics, hygiene, and health) in an engaging way.
Influencer marketing also continues to be an effective sales strategy, thanks to the authentic and catchy way these online stars are pushing affiliated products. Some social media platforms, like Facebook Shops, offer their own ecommerce solution to drive sales.

2. Adapt selling and packaging tactics

Taking what we learned about the American consumer behaviors of today, companies need to adapt by ensuring that popular products are always in stock, offering attractive prices, running regular promotions, and providing fast, convenient, and low-fee deliveries.
In addition, selling products in bulk is a tactic that works well in the US, because of the savings people feel they’re making and the reduced amount of packaging needed. One survey asked US shoppers what would motivate them to switch brands – one of the top choices was larger package sizes.

3. Facilitate payments

Payment method is also a part of shopping convenience. 42% of consumers don’t finalize a purchase if their preferred payment option isn’t available. Most Americans prefer using credit cards and PayPal, in addition to one-click payment like offered on Amazon. Companies need to include favorite options in their custom e-shops to reduce shopping cart abandonment.

4. Gain trust by forming valuable partnerships and affiliations

International companies should also seek to partner with well-established local organizations and businesses that are trusted in the community, and gain the same trust by association. With “American-made” being a large selling point in the US, affiliated in some form can help to lower customer resistance.

US median household by state

5. Spend your marketing budget in the right places and for the right people

The cost of advertising in the US is a lot higher than other countries around the world. To solve this problem, international companies can target American states or cities where the audiences fit their customer persona, as opposed to a nationwide launch. For example, non-essential goods will likely sell better in states where the median salaries are the highest, like California, Washington, Mary Land, New Jersey, Massachusetts, and New York. This counts when running marketing campaigns on Google Ads or social media.
In addition, it’s important to be added on all popular local listings, such as on Yelp.

6. Think beyond images and videos

How products are showcased continues to evolve. US companies are already creating tons of video content, with ad spending reaching $10,164 million USD in 2020, so standing out now means getting ahead of new multimedia technology trends.
A step further than video content is interactive product visuals. Take AR (augmented reality) à la Ikea for instance; clients can visualize how a piece of furniture would like in a given space. Or Sephora, whose app lets clients see how a shade of lipstick will look with real-time face recognition. Brands can easily get on board with this trend via social networks, like Instagram, Facebook, and TikTok, where AR filters are hugely popular and it’s easy to introduce your own.
Another up-and-coming format is 360 degree images to show all sides of a product. Immersive product images lends a hand to convincing potential clients who tend to do a lot more research.

Lululemon’s ecommerce success a lesson for all

In March 2020, Lululemon had to close its stores, yet promptly adapted to new shopping behaviors by hugely investing into their online shopping experience. They amped up free online workouts on their websites and pushed one-on-one video chats with sales associates. The very hands-on and friend-like approach known of sales managers in stores was easily transferred online. For social media and community, they started workout challenges, like the Move and Stay Connected online event.
Though Lululemon already had an added advantage thanks to the nature of their clothing, which is perfectly geared towards more time spent at home, their ecommerce efforts greatly paid off. Lululemon achieved a 40% brand value increase from 2019 and a whopping 157% increase in online sales.

Are you ready for your cross-border ecommerce venture?

With precise geographical and customer targeting, and knowledge about typical customer behavior, international companies stand a chance to have a profitable ecommerce venture in the US as long as they remember to remain highly discoverable, adaptable, and unique. For more information about cross-border ecommerce, read our guide on winning shoppers in new markets.
Further sources

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