E-Commerce and the Pandemic: How Coronavirus Is Fueling The Channel Shift To Digital
After much consideration I pressed the buy button. It was too good a deal not to purchase those shoes. (By which, I mean three pairs of shoes.)
I honestly thought I would never buy shoes online. It seemed obvious why so many things could be procured online, but shoes are rather unique. You generally need to try them on before purchasing.
I had done the research, read all the reviews, maxed out all the coupons and discount codes, and before I knew it, I had broken through the barrier of what products I would consider purchasing online.
Many of you may well have bought shoes online before; some of you may even be ordering all your groceries online or possibly doing Grubhub date nights. We can procure just about anything online these days, and while we’re stuck at home, we aren’t buying “just about anything,” we’re buying everything online.
The numbers are already showing a clear trend. Earlier this year, data showed that brick and mortar retail is down 14% while e-commerce is expected to go up 18%; the largest one-year increase and an all-time high.
How much will US consumers spend on e-commerce and at brick-and-mortar in 2020?
US consumers will spend $709.78 billion on e-commerce in 2020, representing an increase of 18.0%. Brick-and-mortar retail spending, however, is expected to decrease 14.0% to $4.184 trillion.
What effect will channel-shifting behavior have on e-commerce’s share of total US retail sales in 2020?
We expect that e-commerce will reach 14.5% of total retail sales in 2020, representing both an all-time high and the biggest share increase in a single year.
As impressive as these stats were at the time, newer studies already show that data to be trending up. The estimate that stated 15% of all retail would be e-commerce has already been blown out of the water. Recent data shows that Q2 of 2020 has already passed the 20% mark for e-commerce; up a staggering 41% from the same period last year.
This same study showed that the year-over-year increase in online U.S. revenue was 73% according to data collected by Salesforce. Anecdotally, Amazon, the e-commerce juggernaut, now makes up 25% of total U.S. e-commerce. Amazon tripled its grocery commerce and roughly doubled its revenue. Since the outbreak, the company has hired 175,000 employees.
e-commerce is already behaving at Holiday Season-pace and we’ve only just said goodbye to Halloween. It seems clear from the trends that many records for e-commerce will be broken this holiday season.
How can you take advantage of this trend?
While Amazon is thriving, many businesses have had significant disruptions due to the COVID-19 pandemic. Whether it’s supply chain, adapting to the online model, or other issues, it’s been difficult for some businesses to turn the corner.
The truth is, corporations of any kind can benefit by adjusting their model to embrace digital customers. Customers generally expect more when shopping online, and they may be more likely to perform tasks online without ever calling or visiting a store in-person. Convenience is the key! Improving experiences on mobile devices where the traffic growth is even higher is critical. Many market segments where mobile lagged are now seeing significant mobile use (some B2B companies have more than 50% mobile users.)
It’s more important than ever to re-envision how any business goes to market. Field sales are… well, virtual. Tradeshows and traditional advertising are now being replaced by online ads through a variety of channels. Many companies who saw e-commerce as a means to transact payments are now thinking about it in a much broader context. It’s time to address the online customer experience as a whole and increase the types of actions users can take. For a service firm, such as a law firm, it could be as simple as allowing online payments for your clients.
E-commerce doesn’t always mean a typical store, it can simply mean facilitating a sale online, reserving a product at the brick-and-mortar store, setting up an appointment, and so on. There are many ways to move in that direction if your product or service isn’t as easily marketable online. Companies who are adjusting and pivoting to this approach are, in some cases, seeing record sales. Others are experiencing decreasing revenues and losing market share to more digitally-enabled competition.
Certainly, 2020 will go down as one of the more difficult years many of us have experienced. However, we are in the most lucrative quarter of the year where some retailers generate as much as 50% (or more!) of their annual revenue. The question is, are you ready to maximize your opportunities online?
Contact Media Genesis so we can brainstorm how you can best calibrate your online efforts!