🗞 What's New: US e-commerce is estimated to top $1T by 2022

Consumers spent $121B online in the first two months of 2021:

• E-commerce is expected to hit $850B in 2021. "Buy Now, Pay Later" payment methods have grown 215% in 2021, and shoppers order 18% more when installment payment options are available. Although predictions for the future are bright, e-commerce founders should prepare for possible impact as COVID-19 restrictions are loosened.
• Pet wellness startup Chewy reportedly gained 5M new customers in 2020, edging out its competitors by offering incredible customer service. You don't have to send out hand-painted pet portraits like Chewy to retain customers, though. Try aligning incentives more closely with company values and making it easier for customers to repeat buy.
• Founder Yaro Starak recently hit $50K MRR by transforming clients' inboxes. His secret to extremely low churn? Re-investing profit into team building and HR to maintain a top tier client services team.

Want to share your ideas with over 70K indie hackers? Submit a section for us to include in a future newsletter. —Channing

🤑 US E-commerce is Estimated to Top $1T by 2022

from the Indie Economy newsletter by Bobby Burch

E-commerce in the US is expected to top $1T by 2022. The pandemic’s acceleration of e-commerce sales, an increase of $183B year-over-year, won't be slowing down anytime soon.

The e-commerce boom

The no-background: E-commerce is exploding, and a prospective return to a post-pandemic "normal" isn't going to slow it down.

In 2020, US consumers spent $813B online, which represented a 42% growth from 2019. Adobe estimates that US e-commerce will hit at least $850B in 2021. By 2022, it's expected to hit the trillion dollar mark.

The numbers:

• Shoppers spent $188.2B online during the 2020 holiday season.
• In Q1 2020, 10 years of e-commerce growth occurred in the span of 90 days.
• Nearly 150M people across the globe shopped online for the first time during the pandemic.
• Nearly 1/3 of all US e-commerce sales in 2020 were on Amazon.

The drawback: Shopify expects 2021 to be an uncertain year for some e-commerce companies as COVID restrictions are loosened:

Increased competition: Pandemic lockdowns pushed more businesses and consumers online, culminating in a 20% boost in spending. That shift spurred many companies (and 65% of Paycheck Protection Program borrowers) to invest in new technology.

What this means for you: With digital content becoming more important to companies’ marketing efforts, expect digital advertising budgets to continue increasing. That will lead to more customers shopping online.

Here are the most helpful buying trends for indie hackers:

• "Buy Now, Pay Later" methods of payment, popularized by companies like Afterpay, Klarna, and Sezzle, have grown 215% in the first two months of 2021. Consumers using this payment method also placed orders that are 18% larger on average.
• In the first two months of 2021, consumers spent $121B online. This represents a 34% year-over-year increase.
• Online sales for home improvement products grew 60% in the first two months of 2021, while apparel noted a 22% growth margin.
• The Adobe Exchange and Shopify App Store both offer avenues for creators to sell apps and integrations.

Are you an e-commerce founder? How have these findings affected your business? Share in the comments!

Discuss this story, or subscribe to Indie Economy for more.

📰 In the News

📞 Slack is building its own version of Clubhouse and Twitter Spaces.

🥒 Vegan food unicorns are taking over the market. The plant-based meat and dairy industries are worth a combined $22B.

🛍 Snapchat is entering the e-commerce game by acquiring Berlin-based retail startup Fit Analytics.

🚫 The Chinese government has forbidden military members and state employees to drive Teslas, citing national security concerns.

🏢 Facebook, Uber, and Microsoft are all making plans for employees to return to the office, with some coming back as early as March 29th.

📓 Customer Retention 101

from the Demand Curve newsletter by Julian Shapiro

Pet wellness startup Chewy gained (and retained) 5M customers in 2020. Acquiring a new customer costs 5x more than retaining an existing one, so founders should focus on strategies that keep their existing customer base coming back for more.

What is customer retention?

Three important factors contribute to customer retention:

1. Loyalty: Build affinity by providing a quality user experience.
2. Incentives: Align your value proposition with users' desires.
3. Frictionless experience: Make it easy for customers to repeat buy.

How to keep customers coming back

Start by making your checkout process frictionless.

1. Enable one-click checkout using a tool like Fast.
2. Remove the navigation bar to prevent distractions.
3. Encourage account registration, but don't require it.

Create easy, enticing rewards programs.

Promotional giveaways and limited time specials do not build long-term customer loyalty. They get users to try something, but not to stick around. Also, they train customers to only buy from you when you're running a promotion.

Instead of short-term deals, hook users in through a strategic rewards program. For inspiration, check out online consignment store thredUP:

Gamify the experience with multiple ways to earn points, create urgency through reward expiry dates, and include a progress bar to encourage continued engagement.

Personalize customer support interactions.

Unhappy customers quickly tire of repeating their problems to customer service bots. Make them feel heard by personalizing otherwise repetitive support interactions.

You can do this by referring to contact notes and previous conversations, and using real names and faces.

Down-sell to hesitant customers.

Before customers churn, you'll likely see a dip in engagement. If you notice this trend, offer a lower-cost alternative to prevent them from churning.

You'll gain trust by selling only what they need and not what they can't afford.

Reduce involuntary churn.

Churn isn't always intentional. Sometimes it's caused by an expired credit card.

For subscription-based companies:

• Retry the card on file again before reaching out.
• If you need to contact customers, send a mobile-friendly link to collect card info.

Show personalized pop-ups to returning customers.

Instead of greeting all visitors the same way, show returning customers a personalized welcome pop-up and remind them of your value.

For example, Booking.com shows a "welcome back" message for returning visitors (tracked through cookies):

Surprise current customers with freebies.*

Two important notes:

1. Don't wait for birthdays or special occasions because customers will already be receiving gifts from lots of other brands.
2. Relate gifts to your core offering.

Example: Chewy randomly gifts customers with pet portraits (and also gets free social shares in return).

Will you be implementing any of these strategies into your customer retention plan?

Discuss this story, or subscribe to Demand Curve for more.

🌐 Best Around the Web: Links Posted to Indie Hackers This Week

📖 The six principles of great lifestyle businesses. Posted by Alex MacCaw.

💰 I'm now making more than I did at my full-time job. Posted by Rik Schennink.

📵 Why Pieter Levels is unreachable (and maybe you should be too). Posted by Leo Nagano.

🧐 Suspicious upvotes on Product Hunt: Bought? Posted by Michael Sieb.

❓ How much money do you need to be a full-time indie hacker? Posted by Rik Nieu.

🗓 How I got 1.6K Twitter followers in 28 days. Posted by Victor Ponamariov.

Want a shout-out in next week's Best Around the Web? Submit a link post on Indie Hackers whenever you come across an article you think other indie hackers will enjoy.

📧 Founder Yaro Starak Recently Hit $50K MRR

By Yaro Starak

I am one of the cofounders of InboxDone, an email concierge service that custom builds and operates a system to filter and reply to emails based 100% on user preferences. We recently hit $50K MRR, and have very little customer churn! Here's what's next for us.

New customers keep finding us and our churn rate remains very low. Most people are staying with us after they've onboarded.

I think a lot of this has to do with the amazing system and team building my cofounder, Claire, has led in the past few years. This, combined with my own efforts in building up our marketing campaigns (both organic and paid), keeps both sides of our company humming along.

For me personally, this also marks a special milestone as an indie hacker. The largest one month revenue mark I hit with my previous companies was $50K, so everything from here is a new record. That being said, my last company did surpass $2M in total revenue (albeit over a decade), so there are still records to break!

At InboxDone, we are re-investing much of our income into growing our team. We've hired more people for our management team: A new team member will be joining me on the marketing and sales side, and an additional team member will be joining our onboarding and client support team.

Earlier in the year, we brought on a good friend of mine who is knowledgeable in HR, to help Claire with the hiring and matching process. We continue to hire new Inbox Managers, something we need to keep quality up and meet the growing needs of our clients. (Plug: If you know someone who has good communication skills, send them to our site for job openings as an Inbox Manager!)

I'm not sure if we will maintain the current rate of growth once summer hits, but I will continue to experiment and improve upon the marketing campaigns that work. Fingers crossed, we can keep this pace up through the end of the year. If so, we'll surpass all of my 2021 goals by more than 50%, which would be incredible.

AMA in the comments! Thanks for reading.

Discuss this story.

🐦 The Tweetmaster's Pick

by Tweetmaster Flex

I post the tweets indie hackers share the most. Here's today's pick:

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Special thanks to Jay Avery for editing this issue, to Nathalie Zwimpfer for the illustrations, and to Bobby Burch, Julian Shapiro, and Yaro Starak for contributing posts. —Channing