E-Commerce Growth Capital: Trends for 2021 and Beyond

E-Commerce Growth Capital: Trends for 2021 and Beyond

The e-commerce industry was already sustaining steady growth before the disruption of brick-and-mortar retail incurred by the pandemic. Now on the outset of what felt like an overnight transition to digital-first, the resiliency of e-commerce is ever more appealing to entrepreneurs entering or trying to stay afloat of a fickle market chain.  

Though while e-commerce comes with its fair share of conveniences over the traditional storefront model, its dominance implies myriad investments to compete with a now-saturated (though virtually infinite) market space. The chief roadblock for businesses to scale remains: access to capital.  

E-commerce Growth Capital: What is It? 

Growth capital is a flexible form of financing that is ideal for mid-stage retailers en route to scaling up their businesses. In Yardline’s case, when growth capital is allocated specifically toward e-commerce sales, the fully digital lending model allows for real-time analysis of banking data, expedient tailored approvals, and revenue-based repayments.  

This means that—different from venture capital—entrepreneurs are not required to remit equity in their businesses in order to scale, nor are they limited to any fixed use of their funds. Contracts are flexible term to fit the needs and pace of each business, and the extent of involvement in the growth of the business from the capital provider is entirely at the discretion of the customer. 

Banks and old-school venture capital firms (even those that market themselves specifically as e-commerce venture capital lenders) often don’t have the resources or flexibility to keep pace with high-demand e-commerce growth trends, while specialized companies like Yardline tailor their services in tune with marketplace, platform, and industry advancement.  

E-commerce Growth Trends for 2021 (and Beyond) 

According to a recent eMarketer study, global e-commerce sales are slated to top $4.89 trillion for 2021, and account for 21.8 percent of total global retail sales by 2024 (up from 13.6% in 2019).  

It’s no secret: selling online is a high-growth opportunity. However, there are many trends to consider that are driving this growth that retailers should mind as they invest to scale their businesses, all of which point to demand for e-commerce growth capital.  

1. Mobile E-commerce (M-Commerce) 

Convenience and expediency have long-since appealed to consumers, but given the rise of the smartphone generation and the shift to a remote work culture, having choice (quite literally) at our fingertips means making decisions quickly and on-the-go.  

Insider Intelligence forecasts that “mobile will inch closer to becoming consumers’ preferred channel for online shopping within the next five years,” creeping up to 44% of all e-commerce sales by 2024.  The closed marketing chain afforded by m-commerce allows consumers to find, buy, track, and share products all from their personal devices, appealing to the immediate gratification they expect when they pick up their smartphones and start scrolling. 

Offering real-time payment options such as Apple Pay, Google Pay, Shop Pay, and PayPal is a start, but the shift to SMS lead marketing campaigns versus email is also vast and promising. Ultimately, the more you can appeal to handheld expediency, the better. 

2. Selling Through Social 

The implications of m-commerce naturally point to a focus on social media advertising, but the appeal of social campaigns isn’t solely consumer convenience.  

Facebook and Instagram are widely touted as the highest-grossing sales channels available to businesses, primarily in credit to the data they afford entrepreneurs and the niche audiences they can target and direct-deliver to. As “buy buttons” become commonplace in these platforms, retailers can expect a steady blurring of the lines between marketplaces and the information sharing ecosystem.  

However, while social media advertising is arguably a safer investment than more traditional marketing tactics (print ads, radio, word-of-mouth, etc.), it’s not something that entrepreneurs should enter blindly or with limp consideration. A creative, aggressive, and consistent social strategy is vital for success, which employs a fair bit of resources.  

3. Globalization of Retail 

Being increasingly plugged in online also means more frequent, simpler cross-border exchange. Taking your e-commerce operation global might not be first-up on your agenda as a business owner, but it should definitely be considered an eventual reality.  

Not only does tapping into an international market vastly increase your consumer base, but if you’re able to source your product through an international fulfillment network (like Spacegoats, for example), you can foster more consistent delivery time and cost metrics, virtually agnostic of customer location.  

Once you’ve gained traction on a more global level, it may also be wise to invest in international versions of your website, hiring native copywriters to polish your appeal to certain regions.  

4. Planning for Supply Chain Disruption 

Between COVID-19 and the Suez Canal situation, business owners heard the wake-up call: the global supply chain is far less stable than we gave it credit for.  

Earlier this year, Deloitte surveyed executive panels to find that nine in ten companies are actively investing to improve the resiliency of their supply chain in 2021, as they now view the matter as high priority for strategic planning purposes.  

To do so, businesses are identifying alternate “back-up” suppliers and distribution routes, optimizing their manufacturing lines for multi-product flexibility, and accepting capital for liquidity or to cover seasonal cashflow fluctuations, amongst other strategies. 

5. Omni-Channel Sales 

DTC is also gradually losing its luster as e-commerce marketplaces gain familiarity and trust amongst consumers. While a product may be the initial appeal for a consumer, the brand (I.e., a story, an appeal to a lifestyle, etc.) is what drives a repeat customer following. Brands housed under the Amazon, Walmart, or Target marketplace umbrella benefit from the mega-recognition, quality expectations, and consistency they’ve garnered over time. 

In 2020, Amazon alone accounted for 31.4% of U.S. e-commerce growth trends, but that was actually a dip from their 43.8% dominance in 2019. As we know e-commerce in general is on the rise, this data suggests that consumers are diversifying their spending across multiple channels.  

Meaning: sellers need to embrace an omni-channel sales strategy to build their visibility and attract a now widely dispersed pool of qualified leads. 

6. The Downfall of Venture Capital 

All of the above trends demand significant investments for entrepreneurs to stay abreast of the industry, whether through time, resources, or capital. However, the way businesses are funding these initiatives is also in flux.   

For e-commerce, venture capital often puts undue pressure on businesses to grow quickly with market share and new customers at the forefront of consideration, often ignoring the integrity of the brand and the evolution of a repeat consumer following. There is limited understanding of the e-commerce industry across old-school lending firms (banks included), and the equity and influence retailers have to sacrifice to scale no longer seems a worthy risk for rising e-commerce startups.  

In a worst-case example, Tyler Haney, founder of Outdoor Voices (a DTC athleisure brand once crowned as “the next Lululemon”), was nudged out as CEO of her business by investors right at the peak of her startup’s success. Based on stories like these alone, choosing flexible-use, non-dilutive financing over venture capital should be a no-brainer for growing businesses. 

Why Yardline for E-Commerce Growth Capital?  

 Because Yardline’s chief mission is to help entrepreneurs scale their dreams of success, our capital customers operate with only as much influence or advice as they choose to seek from our team. And as a specialized e-commerce growth capital provider, you can trust that we maintain an intimate pulse on industry trends, evidenced by our team of seasoned e-commerce experts and our vast partner network.  

In other words, not only can Yardline provide the capital to help your business optimize for mobile, increase social ad spend, globalize your reach, stabilize your supply, and expand to multiple channels, but we can also easily connect you with seller resource platforms to lever the success of your initiatives most efficiently. 

Learn how Yardline Capital can help you scale and profit through the next wave of e-commerce growth here