As we start a New Year hopeful of returning to a more familiar world, we thought now would be a good time to look back on 2020 and what tech trends emerged over the course of the year.
As Covid-19 took its grip, businesses had to rapidly adapt their systems and propositions to enable them to continue operating during a prolonged period of lockdown. Needless to say, businesses that already placed their digital proposition front and centre were better positioned, but many were able to quickly pivot. This ability for a business to quickly adapt is testimony to not only the business owner and staff but also the breadth and quality of technology that is available to us now.
The pandemic accelerated the growth of numerous technologies, we will focus on ten that we feel made the most impact in 2020. Whilst many of these are by no means new, the dramatic changes Covid presented helped them gain momentum. In fact, 2020 saw many tech shares experience huge growth, Zoom, Amazon, Shopify, Square and Upwork being a few standouts.
Feeding a lockdown
As Uber’s ride-hailing revenue dwindled in 2020, revenue generated by Uber Eats has more than doubled, in the three months to 30 September, jumping 124% from the same period in 2019. A stark example of how much consumer habits have changed, with “eat at home” dining booming throughout the pandemic. No doubt, ride-hailing will continue to be a core part of Uber’s businesses post-Covid, but Eats has certainly helped it weather this challenging period.
It’s not just Uber Eats, of course, Just Eat and Deliveroo are brands that also helped power the eat at home boom. Together the takeaway titans posted breakneck double-digit growth, with Deliveroo’s brand value surging 40% to hit £1.6bn while Just Eat rose 19% to £2.2bn!
One new trend that did emerge was the rise of the restaurant cooking kit. As restaurants shuttered dine-in offerings many of our favourite restaurant brands started to offer kits for the consumer to purchase online, giving them everything they need to recreate their favourite dish at home. For smaller restaurant groups and independents this trend offered a real lifeline, helping them to keep their kitchens open, produce suppliers busy and their customer's appetites satisfied. We are pretty confident this trend will stick and will be part of consumers long term dining habits.
With the family fed, what about our pets? The online pet sector was already growing rapidly, with pet food e-commerce growing by 53% year-over-year compared to bricks-and-mortar growth of 0.7%. This growth accelerated in 2020, due to Covids-19’s impact on driving consumers away from physical stores and towards online to meet their pet product needs.
It is very clear that the hospitality industry has been hugely impacted by repeated lockdowns, creating a very challenging period for all in this industry. We hope that 2021 brings better times for everyone in this sector.
Bricks-and-mortar closed, e-commerce blossomed
Much like hospitality, the retail industry was at the pointy end of the spear when it came to feeling the impact of Covid. This sector was already feeling the impact of the shift to online shopping and was having to adapt to assure it’s future. Sadly, nearly 180,000 retail jobs were lost in the UK in 2020, with many national chains and independents shutting their stores forever.
It is very clear that retailers with solid e-commerce offerings and infrastructure in place were better positioned to adapt to the change in our shopping habits over the course of 2020. UK retailer Primark is well known for its huge clothing stores, serving thousands of customers every day, amazingly the retailer has no e-commerce site and its business model is solely based on bricks-and-mortar sales. Repeated Coronavirus lockdowns have cost Primark £800m, with the clothing retailer expecting profits to tumble by two-thirds this financial year.
Smaller retailers where quicker to adapt their business models. Theme based platforms like SquareSpace, Shopify and WooCommerce got small to medium-sized businesses quickly online and selling to old customers and new, driving traffic through paid ads in social media. As we all stayed at home, the “Shop Local” movement helped reinforce the importance of our local shops, cafes and restaurants, use them now or risk losing them forever! Many also leaned on click and collect, an experience that provides not only a convenient solution to our shopping needs but also goes some way towards replacing the experience we all missed.
As many retailers quickly pivoted, the million-dollar question was “What are people buying during a pandemic?”. Masks and face coverings have been constant throughout 2020. According to Google Trends data, worldwide searches for “mask” climbed sharply upwards in mid-to-late February 2020, before beginning a much more dramatic climb in mid-March 2020, reaching their highest peak in mid-April.
Masks are something Vistaprint never anticipated selling, however they have been able to pivot their product offering to tap into this demand. Normally, Vistaprint would have looked in-house to develop the e-commerce experience for the masks, but this was something completely different. Instead, they approached digital product agency Work & Co, who worked with them to build a completely new experience. Vistaprint and Work & Co had the new site up and running, using brand new technology that had been developed specifically for the site, together with a process for creating and delivering the product — all in just two weeks. Having bought a few masks from Vistaprint, I can vouch for the quality of the online experience and the fine fit of the masks!
Digital payments and subscriptions are integral to powering these e-commerce experiences and this is something we will cover next.
Digital financial services kept the money moving
I can remember a time when it was hugely expensive to build custom payment gateways for your web business. Thankfully those days are long behind us, with companies like Stripe and Klarna leading the charge in this sector. As with the technologies we have covered thus far, digital financial services experienced growth in users and revenue throughout 2020.
Klarna, the leading global payments and shopping service, announced in September 2020 that it had secured $650 million in an equity funding round, at a post-money valuation of $10.65 billion, which ranks Klarna as the highest-valued private fintech in Europe and now the 4th highest worldwide! In the context of the current accelerated switch to online retail and evolving consumer preferences, Klarna has seen a surge in demand, adding more than 35,000 new retailers during the first half of 2020.
“Klarna has seen a surge in demand, adding more than 35,000 new retailers during the first half of 2020”
2020 was also a record year in the UK for the number of new businesses set-up, seeing an extra 84,758 businesses setting up in 2020 compared with 2019. This increase was primarily driven by redundancies, with those affected looking to set-up their own businesses in response to a challenging job market. Sectors seeing the highest growth included e-commerce (up 88%), clothing (up 55%) and, unsurprisingly, retailers of medical goods (up 176%).
This of course had a knock-on effect in the banking sector, as these new businesses looked to open new bank accounts. UK based fintech Starling Bank was one we watched closely over the course of 2020. As one of the few banks that participated in the UK Coronavirus Business Interruption Loan Scheme (CBILS), Starling saw extraordinary growth in the size of its loan book from less than £100 million to more than £1 billion in 2020. In the last eight months, Starling has played a critical role in supporting SMEs through the pandemic, ensuring they have access to capital during these challenging times. The Starling banking app also had to evolve to support their customers, with new features such as “cheque imaging”, enabling customers to pay in cheques from home, they now process over 30,000 cheques a month using this tool.
So whether it was money transfer, digital banking or payment gateways, global fintech rose to the challenge and helped keep the wheels of commerce turning for us all.
Zoom replaced the meeting room
Winner of most overused phrase of 2020 definitely went to “can everyone see my screen?”. The video call or “Zoom” was as ubiquitous as the face mask in 2020. Whether it was your weekly team retrospective or family quiz night, platforms like Zoom, Google Meet and Facetime help keep us all connected.
For the first quarter of 2020, just as the pandemic started to spread, Zoom reported revenue growth of 169%. New customer subscriptions brought in 81% of that growth, according to financial chief Kelly Stechleberg. … Zoom’s income neared $186 million, up from a mere $5.5 million a year earlier.
Some stats on Zoom peak daily meeting participants:
December 2019 - Under 10 million
March 2020 - 200 million+
April 2020 - 300 million+
Video calls and home-working were in-part responsible for a huge increase in our collective broadband usage in 2020. Openreach, BT Broadbands provision division which provides access for many UK ISP’s including BT, PlusNet, Sky, TalkTalk, Vodafone and Zen saw an unprecedented demand across the network in 2020. Daily records for broadband use were broken as many as 15 times, with 50,000 petabytes (PBytes) of data being consumed across the country, compared with around 22,000 a year earlier!
Openreach said it very quickly saw about a 30% increase in daytime broadband use compared with pre-Covid times, mainly due to a huge increase in home-working and, particularly during the first lockdown, homeschooling.
Our schools closed and learning went online
As I write this, schools across the UK have closed for the second time in 12 months, the first during the lockdown in the Spring and now to help curb the spread of Covid-19 in the Winter of 2020/21. Between May and June 2020 87% of parents said one or more children in their household were being homeschooled.
As with many of the previous trends, some were better prepared than others, the contrast between state and fee-paying schools being particularly stark. Many of us in tech are very familiar with tools such as Slack, Zoom and Google Docs, however for schools, lacking knowledge of these tools, alongside having to wade through mountains of red tape, the transition to online learning was often challenging to implement.
Another issue parents and children faced was access to the technology required to enable remote learning. Just under 1 in 10 (9%) of parents with a child who was struggling gave a lack of devices as one of the reasons, this was significantly higher for households with one adult (21%) than households with two or more adults (7%). Access to technology is a broader societal issue that needs addressing and is something that we need to address to ensure equal opportunity for all.
On a lighter note, fitness guru Joe Wicks replaced the PE Teacher and led the nations charge to keep our young people active. PE with Joe became a mainstay for many families throughout the lockdown. His first workout live stream began in late March, just hours before Boris Johnson went on to tell the UK it was entering lockdown. His second video was watched by nearly one million people, breaking a world record. The 30 minute live streams went on to run for a further 18 weeks, in addition to keeping children fit the endeavour went on to raise over £580,000 in ad revenue that was donated to the NHS. The nation salutes you, Joe.
That’s a wrap for part one, in part two we will be covering five more tech trends that defined 2020: IoT, 5G, Machine learning & AI, contact tracing apps and the rise of streaming services. Is there anything that has not made the shortlist that you think we should mention? We are happy to keep this series going and expand our trend list further, please let us know what we should be including next.
As always we would love to hear your thoughts, do let us know in the comments below if you have any questions or want to know more!
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