In mid-March, the United States experienced unprecedented times when essentially the entire country shut down with stay-home orders. Out of that chaos, it was as though the entire population went virtual. And while social hangouts turned to video conferencing, those needing to continue to make purchases while dealing with closed storefronts, turned to online shopping. e-Commerce companies who were native to the online world were better outfitted for the new boom, while small businesses and conventional retailers rushed to fix newly created systems and overwhelming shipping challenges. The Internet filled with a frenzy of unhappy consumers who were dealing with lost packages, bulk panic buying, and late/delayed packages not arriving until months later. Companies were simultaneously trying to keep their employees safe and their customers happy.
Covid-19 created entirely new buyer behaviors never seen before. Not only were consumers purchasing “essential” items online, but they continued to purchase non-essential items to avoid spreading the novel virus. Digital revenue growth 14.6% in Q1. Consumers spent 30.1% more than the year before in the first half of 2020.
Companies such as Amazon jumped 43.3% in North American revenue in Q2. The first half of 2020 has already been compared to sales like the holiday season (or Q4). Salesforce.com Inc. reported that ecommerce had an unprecedented 73% year over year increase in the U.S. online revenue for Q2. This data from the activity of more than 1 billion global shoppers flowing through its Commerce Cloud platform.
Goodbye Brick and Mortar
Since the massive incline of online sales, brick and mortar have taken a huge hit. Companies such as Pier 1 Imports, Men’s Wearhouse, GameStop, Tuesday Morning, J.C. Penny, and GNC are closing a majority (if not all) of their retail spaces. With companies trending to move online, what will that mean for ecommerce? Efforts across retailers will continue to shift focus to online shoppers, leaving consumers to only buy their goods in one place. Since these companies cannot service their customers in stores with great customer service, they must make up for it in another way likely leading to free shipping on all orders and returns.
Santa’s Going Online
As we enter the heaviest shopping quarter of the year, what should retailers expect for the holiday season? With air travel projected by Zeta Global to be less than normal with 58% of consumers not planning to travel home for the holidays, the equivalent to 31 million fewer travelers will be left to heavily rely on e-Commerce companies to help order and deliver presents to family members all around the world. This will create advantages for ecommerce brands and will be important for companies to seize opportunities that will bolster their abilities to ship both domestically and internationally.
Though online shopping has been changing the retail world slowly over the last 2 decades, Covid-19 has forced major online adaptations for retailers and has shown no signs of slowing down. What are your predictions for the holiday season? How much more will ecommerce grow in 2020?