Ecommerce sales ballooned during the pandemic and are expected to get even bigger — hitting the $1 trillion mark by 2022.
That's according to a study released by Adobe Analytics that found the lockdown economy has helped boost online shopping by an extra $183 billion since March 2020. That is a 20% growth, roughly the size of last year's holiday shopping season when buyers spent $188.2 billion online.
The report predicts it will only continue. Shoppers spent $813 billion online last year, up 42% from 2019. This year's spending is estimated to be somewhere between $850 billion and $930 billion. That means that by 2022 ecommerce spending might break the trillion dollar threshold for the first time.
"The pandemic has fast-forwarded ecommerce, driving levels of online sales we had not expected to see for a couple years. And consumers are not going back," said Adobe Digital Insights director Taylor Schreiner in an email. "People who successfully purchased loungewear in the last year for instance, are less concerned about the lack of a dressing room moving forward."
One of the biggest growth sectors have been online grocery shopping, with the rise of Instacart and grocery delivery services. Over the first three weeks of February 2021, it grew 230% in comparison to January 6 to January 26 the previous year, before the pandemic struck. Sporting goods also saw a 75% growth in that same period.
The way people shop is also changing — curbside and in store pickups of online orders grew 67% when comparing February 2021 to the previous year. Adobe surveyed 1,000 consumers, finding 30% actually preferred these pick up options to delivery.
"For many retailers, this service is no longer [just] 'nice to have.' Consumers value the convenience and speed, and it'll evolve how physical storefronts are developed moving forward," said Schreiner.
Buyers are also more likely to use a delayed payment option — selecting the option for "Buy Now, Pay Later" to place orders that are 18% larger — than standard payment options. This payment method grew 215% for the first two months of this year, in comparison to last year, which Adobe analysts attribute to "consumers [dealing] with financial uncertainty."
As customers were delaying paying, they were also shopping more. People spent more time scrolling throughout the day as bots reminded them of what was left in their cart.
Adobe's analysts note that "online shopping became a ubiquitous daily activity during the pandemic."
Sales and holiday shopping became less important. Memorial Day, Labor Day and President's Day all brought in less revenue than other days that same week. Even the traditional online holiday shopping spike — which usually lasts from Thanksgiving to Cyber Monday — dipped 9% from last season's haul, a change of $600 million.
The Digital Economy Index uses real time data from Adobe Analytics, which analyzes over a trillion site visits and online transactions across 100 million product SKUs.
"On a state level, California grew 35.4% year over year in the first two months of 2021," said Schreiner. "This is impressive growth for a market that was already adopting ecommerce at high rates prior to the pandemic."
According to HGInsights' index, more California companies use Adobe Analytics to track consumer behavior than other states.
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Farm-to-Phone Apps Have Surged During the Pandemic. Will They Stay Once It's Safe to Return to the Grocery Store?
Sarah Hernandez is a full-time farmer, though she doesn't own a huge farm.
She grows microgreens, among other vegetables and herbs, in her yard in La Mirada. Microgreens, bite-sized version of larger veggies, don't require much space; Hernandez grows them vertically on 10x20 flats stacked on wooden shelves. She visits four farmers markets each week, then delivers microgreen boxes straight to customers who find her on CropSwap.
The app offers a farm-to-phone marketplace, connecting consumers directly to farmers. It's one of several services that have taken hold during the pandemic, allowing consumers who would otherwise go to farmers markets or grocery stores to get fresh produce or other goods delivered. CropSwap is also making it easier for some home-based growers to tap into the gig economy and sell within their communities.
CEO Rob Reiner co-founded the app with Daniel McCollister. The way Reiner tells it, they seem like an unlikely pair. Reiner grew up in Houston, studied computer science, and moved to NYC with the dream of being a Wall Street broker. There, he worked in software startups, but didn't find himself attached to a project that felt like a challenge.
Then he met McCollister in 2017, who invited him to see his gardens in Woodland Hills filled with an array of produce — kale, Brussels sprouts, onions, garlic, beans, tomatoes and more.
"I had believed you needed 100 acres to grow food, and here was Dan, showing me one acre that was growing more food than an entire neighborhood could consume," Reiner said.
McCollister wanted an easy way to sell or donate his food to his community — like a Craigslist or Offer Up for produce — so that's what the pair built. Their first version of CropSwap launched in 2017 and saw some 7,500 people selling or bartering various produce in the L.A. area alone. Got an orange tree? Put the fruit on CropSwap.
Screenshots of CropSwap's platform.
But Reiner found early on that users would often buy a bunch of oranges one week, but the next week, they'd go back to Whole Foods.
"There wasn't an understanding that the farmer was there to stay and could continually give you that produce," he said.
To attract both consistent consumers and — also key — investors, Reiner pivoted the app. Its goal became to teach people used to visiting chain grocery stores about local food systems and how to tap into them. He scaled back the bartering component of the app, though users can still trade messages with farmers.
"I could have a million users on CropSwap, but if I'm not attacking the WalMart consumer and the WalMart consumer is still buying [Walmart's] produce, then I haven't done my job," he said.
In 2019, CropSwap started offering curated boxes of seasonal, local produce that customers could receive right after it was harvested. Reiner described it as a hybrid consumer-supported agriculture ( CSA) box. Customers can subscribe to them or get a one-off. All farmers have to do is curate the boxes, put them on the app, and fulfill sales.
"We give farmers the tool to create their own delivery options," Reiner said. "They can do it all themselves and sell direct to consumers."
Customers who download the app can browse what's available in their area for either pickup or delivery. Farmers drop pins to indicate five-mile radiuses where they deliver, usually on specific days of the week.
One might be inclined to think that farmers markets would be CropSwap's biggest competitor, but Reiner said it's actually other apps such as Barn2Door and subscription services like San Francisco-based Imperfect Produce or Sacramento-based Farm Fresh to You.
Unlike those services, which use third-parties to box and handle deliveries, CropSwap farmers box their own food and the same farmhands who picked the produce are often the ones who deliver it.
In Los Angeles, the largest farm on the app is Sow a Heart, which also owns Sage Plant-Based Bistro with locations throughout the county. On CropSwap, they offer a Family Harvest box jammed with produce for $55, including delivery fees. By comparison, a Whole Foods cart on Amazon Prime that contains roughly the same items comes out to about $85, not including tip.
CropSwap does not charge sellers to be on the platform as others, including Seattle-based Barn2Door, do. Instead, it takes 8% of sales — in line with what a farmers market might charge — once a seller reaches 50 subscribers. Reiner said they're able to keep consumer costs low because they're not spending money on storage facilities, branding, marketing or transit.
From Consumer to Micro-Farmer
Hernandez had been following CropSwap on social media because she was interested in potentially trading her seeds for other produce. About six months ago, CropSwap reached out to ask her if she'd like to sell on the app. So far, she said "a good amount" of people have tried her variety microgreens box and she's gotten a lot of useful feedback. She currently has about 10 regular subscribers, a number that fluctuates with customer needs. Some are weekly buyers, while some purchase every other week. Hernandez said CropSwap is the most direct farmer-to-consumer experience she's had apart from the actual farmers market.
"I make the deliveries myself every week. My boyfriend helps me out, but it's just us two," she said "I'm growing it, we're cutting it, packaging it, and we're delivering it."
Through the app, she can tell her customers if she needs to change delivery dates to accommodate her market schedule or travel plans. Customers can also ask her questions, just like they would at the farmers market. If she gets more subscribers, she has space to add another set of shelves and she'd be able to hire an employee to help package and deliver produce.
There are other small vendors, too, like a beekeeper in West L.A. who sells honey flights, a jam maker in East Hollywood, and more home microgreen growers like Hernandez. Reiner said there are about 250 subscribers in L.A. Some get just one box, but some larger vegetarian or vegan families may purchase up to five.
The direct-to-consumer approach has served as a boon for some farmers during the pandemic. In Richmond, Virginia, Three Fox Farms' founder Alex King told RVA Magazine he didn't know what to do with his crops after restaurants and farmers markets closed at the onset of the pandemic. King ultimately partnered with Leafy Lanes Urban Farms to offer a box of assorted fresh vegetables, which they sold on CropSwap. They were so successful, the farmers said, they had one of their strongest seasons and King was able to invest in new hoop houses and a walk-in cooler.
Hernandez also had a good year saleswise. She said she found her customers wanted to eat healthier and appreciated the contact-free delivery experience CropSwap could provide.
Beyond the Pandemic
Reiner doesn't think pandemic subscriptions are a fluke, though he has had investors who question that. Still, he's betting the quality of fresh, local produce delivered straight to consumers will "ruin" them for inferior fruits and vegetables that have to be stored in a warehouse. Plus, he said, some CropSwap growers offer products that are hard to get in stores. For example, a farmer who specializes in iron-rich kale for vegan bodybuilders.
In its next iteration, Reiner plans to partner with chefs to make the boxes more of an experience by offering recipes and cook-alongs. CropSwap is also working on a partnership with Nourish LA to offer customers the ability to donate boxes to other families. Reiner also envisions a tracking system that lets customers know how their purchases will impact their health, environment, and communities and a future where CropSwap could make suggestions to make its customers healthier.
"Imagine if we knew your intake because of the product you were consuming," he said. "If I knew, for example, that you were low on iron, I could start suggesting boxes that might increase your iron."
CropSwap has also partnered with Jamiah Hargins' Crop Swap LA, founded in 2018 to allow Angelenos to share produce. Crop Swap LA is building new neighborhood gardens in West Adams. The produce they yield will be available on the CropSwap app, and neighbors will receive a code to become the urban farms' first subscribers.
"People are going to start seeing how much food can come from local gardens. And that's going to start deteriorating the mindset that you need so much land to grow food," Reiner said. "I would love it if kids could get involved in this and tell their parents I'm going to turn my whole backyard into selling food for my neighbors."
Valentine's Day is just around the corner and these flower delivery services are readying for the holiday rush. Americans order over 250 million roses for Valentine's Day, according to the Society of American Florists, and this year — with more staying at home — online delivery sales are poised to grow.
"Because of the pandemic, there is a definite downward trend in face-to-face [dates] and that sort of thing," said Steve Dionne, executive director of California Association of Flower Growers and Shippers. "And it appears, as we get close to the holiday, our predictions have [been] borne out that it's definitely creating a surge in demand. The industry as a whole is expecting a very, very strong Valentine's Day, from the standpoint of consumer demand."
The proliferation of flower delivery apps, some who rely on imported flowers, has reconfigured the industry for many, but he added, it has created more distribution channels for local growers.
"The internet sellers are disruptors in the industry," he said. "But if at the end of the day that results in a positive consumer experience and more access to the product, then it's a net gain for the whole industry."
Only Mother's Day surpasses Valentine's Day in flower orders, said Farbod Shoraka, chief executive of BloomNation, but because moms are more flexible when it comes to the exact date, deliveries for Mother's Day are often distributed over the course of a week. This makes it easier for florists to arrange bouquets and coordinate deliveries while still using the freshest flowers. Valentine's Day, however, can be a challenge for florists.
"[There is] really high pressure around delivering on that special day of Valentine's," said Shoraka. "And so you go from a florist handling, maybe, you know, 10 orders a day, 15 orders a day, if you're a larger shop, they might do 20 or 30 orders, [but on Valentine's Day] it's all of a sudden, 100 or 200 or 300 in a single day."
The Marina del Rey service has a large selection of Valentine's Day arrangements, all within the $39 to $69 range and all made with flowers sourced from local farmers. Because of the spike in sales near the holiday, orders must be placed by February 11th. The company also offers a subscription service for weekly, biweekly, monthly or bimonthly arrangement deliveries. Subscribers also receive free shipping and a 30% discount on their orders.
The Bouqs Co. started as a Shark Tank pitch in 2014 by John Tabis and Juan Pablo Montufar. They left without a deal, but went on to pursue their idea: an online flower shop that was farm to table, without buyers in between. They have a "curated" group of local florists that complete the arrangements offered on their website, allowing for same day delivery in some cities.
Shark Tank judge Robert Herjavec remembered the company three years later, when he was buying wedding flower arrangements and was shocked at their steep prices. Herjavec became an investor in the company, which has raised $74 million to date.
BloomNation is an online platform for local florists. It has over 3,000 florists in its network, and offers a much wider array of arrangements than The Bouqs and Teleflora. Local florists create their own bouquets. The company does not coordinate delivery for the florists, but CEO Farbod Shoraka said it will soon announce a partnership with Mountain View-based robot delivery company Tortoise, for contactless robot delivery. Some Los Angeles florists on the platform include Huntington Flowers, Dolce Fiori, JNJ Florals and LA Floral Designs.
BloomNation got its start, in part, thanks to a poker championship.
Co-founders Shoraka and Gregg Weisstein saw that local florists were struggling to get themselves online without relying on big flower brokers like 1-800-Flowers. They added to their team World Series of Poker champion David Daneshgar, who raised a big portion of their seed round funding after entering a poker tournament in Los Angeles and winning $30,000.
BloomNation prides itself on promoting local florists' creativity and autonomy. They do not dictate the arrangements or pricing; florists choose what they post and sell on their websites.
Teleflora offers same-day delivery on a wide range of set bouquets arranged by local florists. The company has a network of over 10,000 member florists in North America and 20,000 affiliated florists internationally.
Founded in Los Angeles in 1934, Teleflora is one of the oldest flower delivery services, its original name being Telegraph Delivery Service. The company is privately owned, and its current president and chief executive is Jeff Bennett.
Teleflora's member florists fill local orders that are placed through Teleflora's website. The startup doesn't handle flower sourcing or delivery for its florists, but it provides the arrangement designs they should follow and the website customers order from. One of the company's key appeals is that it never delivers flowers in a box — every arrangement is hand delivered by the local florist.
UrbanStems began as a bike courier service, delivering arrangements of flowers from Rainforest Alliance-certified farms to the Washington D.C. area. Now they've expanded to shipping their arrangements, plants and gift boxes to all 50 states, with prices starting at $48.
The company has raised $32 million to date, and recently announced a partnership with Kate Hudson's King St. Vodka to offer the "love fern," a nod to her role in the movie "How to Lose a Guy In 10 Days."
Headquartered in San Francisco, Farmgirl Flowers offers flower shipments to the continental United States, sourcing all flowers from local farmers. Arrangements range from $45 to $250, with specific flowers varying with the seasons.
Their bouquets are seasonal — the photos on their site don't represent exactly the bouquet customers receive, and the exact blooms are dependent on what farmers have available. Founder and chief executive Christina Stembel wanted to step away from imported flowers and support American growers, she told The New York Times, and launched Farmgirl flowers from her living room in 2010.