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Staring at impossible comps

Peter Messana's headshoot
By Peter Messana - CEO

While some ecommerce retailers went out of business in 2020 due to the pandemic there was a large set of retailers that saw explosive growth as the world shifted to stay-at-home orders and stores were shuttered.

We all have read the McKinsey report that ecommerce grew ten years in three months and the chart is impressive, but that was 2020. What is in store for 2021 is a bit of a return to reality, which for some will actually be an increase in sales while many others will see a decrease in sales.

Those dramatic spikes in sales for many categories will come back down to a more normal level. They will not come back to 2019 levels but I would be hard pressed to believe that 2021 online sales will surpass 2020 for most retailers. The real issue will be teams at all these companies that thrived last year are staring at near impossible comps and leaders will push them to achieve positive sales comps.

In the past I have written about being prepared for 2021 by investing properly, and a second blog post about what to do to not lose momentum this year. In general, I said people needed to step on the gas so that they are positioned to be prepared for when things do slow down and all the places to look at now that the dust has settled.

Both of those pieces are never truer than today as I have spoken to many of our customers and I have heard things like, “My boss expects sales to be at or above last year and I don’t know what to do.” If the company didn’t invest then I am not sure how a reasonable person could expect something like that to happen in categories where the pandemic inflated sales. Those that invested and followed my earlier type of advice have a better chance, but definitely not a layup by any means.

This was all reaffirmed yesterday when I was asked what are the top three things someone should do right now in ecommerce. My top advice was simple, either hire an ecommerce leader if you do not have one or heavily invest in optimization products. Last year was not the year for optimization as sales were through the roof for many. Now that things are coming back to a more “normal” level, you have to squeeze all the juice you can out of site visitors, and the best way is to have a team that understands how to optimize the experience. Our product is ideal for this as it helps merchandisers align the right product to the right person and drive higher conversion and AOV.

Since ~97% of your visitors do not convert, anything that can increase conversation lowers that number and it is far cheaper to increase conversion than to acquire a new customer. However, if you haven’t invested in your team and empowered them you are set up for negative comps as you lap 2020 numbers, and even if significantly higher than 2019 teams will still feel a bit defeated.