eCommerce Trends 2020: How Has The Pandemic Affected Digital Sales?

October 12, 2020
Up Inc.

No Surprise: eCommerce Sales Have Been Trending Up In 2020

ecommerce growth since pandemic begun
What can be said about 2020 that hasn’t already been said, or shouted, or made into a meme? The coronavirus has impacted everyone this year, and altered essentially every industry, which has resulted in what one could call business as unusual. With the stay-at-home orders that rolled out across the country starting in mid-March, we saw a shift in how customers navigated the new normal.

As desire to slow the spread of Covid-19 kept more people inside, and a virtual shutdown of the economy ensued, shopping and services shifted from brick and mortar stores to the online space. Even grocery stores that provided essential goods adapted to new safety requirements, and other businesses filled in where needed, delivering food directly to doorsteps. In fact, Instacart saw a surge in their daily downloads of over 200% from February to March of 2020. Similar upticks were also experienced by other food delivery services, like Walmart Grocery and Shipt.

In addition to these eCommerce trends that may seem obvious by now, there are quite a few intriguing trends for eCommerce businesses that you come across if you dig a little deeper. Also interesting are the nimble marketing methods that have paid off in these unprecedented times. Below we share some statistics on eCommerce trends for 2020 and explore creative ways for businesses to respond to the wants and needs of their customers

But First, a Quick Look Back at eCommerce Trends

ECommerce sales have climbed steadily since suffering a setback during the housing crash and financial market meltdown in 2008. As one would expect, consumers were dealing with debt, and strapped for cash, so shopping took a backseat. Each year since 2009, however, online sales increased.

In 2010, online sales in the U.S. accounted for less than 7% of retail sales overall, but by 2019 it more than doubled to 16%. During that same time, eCommerce took off at an even more impressive rate worldwide, increasing by 600%. Consumers began to feel more comfortable with online shopping, and companies continued to expand options and improve the customer experience.

Observing the growth of online sales over the last decade is equally impressive when you look at the raw numbers. E Commerce sales in the U.S. totaled approximately $170 billion in 2010, and by 2019 they totalled $600 billion. To look at it another way, eCommerce sales experienced growth between 13% and 18% year over year between 2010 and 2019.

In the year 2000 (insert Conan O’Brien reference here, if you’re old enough), Amazon and PayPal were already established players, but it took several more years for online shopping to become more common and convenient. As opposed to the first decade of the new millenia when most online shopping consisted of specialty stores, books on Amazon (remember books...made of paper?), and halloween costumes on Ebay, the second decade brought tons of new eCommerce options. Also, the appearance of tablets and smartphones helped spur the growth of online consumer activity. With the ability to buy right at people’s fingertips, it didn’t take much to nudge them along on that customer journey.

The 2020 eCommerce Surge: What Just Happened?

Though it alternately seems like yesterday or 100 years ago, we can now look back at the beginning of 2020 with a little perspective. The data supports what many of us sense or would have suspected. Due to the coronavirus pandemic, millions of people around the world stayed home. This, of course, affected commerce on a literal global scale.

In the United States, the president declared a state of national emergency on March 13th, and governors across the country enacted measures that shuttered non-essential brick and mortar businesses, and limited how individuals could gather in public spaces. Leaders encouraged people to stay at home as much as possible to flatten the curve, avoid the spread, and stay safe. As a result, retail sales saw a huge shift to the online space.

The US Department of Commerce estimates that we as a nation spent approximately $212 billion between April and June this year on eCommerce, which is an almost 32% increase from the first quarter. As another point of comparison, this estimate for the second quarter of 2020 represents a 44.5% increase from the same period in 2019. This increase in the eCommerce arena occurred while total retail sales actually decreased 3.6%, so these data really underscore a seismic shift in consumer trends.

Many customers have continued to avoid crowded stores, sought out delivery services, and changed up purchasing patterns. Again, if we look at the Department of Commerce data, eCommerce now accounts for approximately 16% of all U.S. sales. Early on there may have been a bit of frenzied buying that reflected customer uncertainty and multiple unknowns. And though we still don’t know exactly how long there will be public health measures that impact in-person shopping (Covid-19 cases are on the rise in 39 states at the time of the writing of this article), it seems that many will still be procuring products online for the foreseeable future. And considering that online sales have been steadily increasing over the past decade, there’s no reason to suspect a sharp decline or a reversal to the trend.

Who are the winners and losers?

It’s safe to say major retailers like Amazon have made out like bandits during this eCommerce business boom. Amazon had a record-breaking quarterly profit and saw 40% growth in sales. So you can breathe a sigh of relief if you were worried about Jeff Bezos’ well-being. He’s doing just fine. Since Walmart and Target had already begun investing in their eCommerce capacity, they were also able to benefit, setting records and increasing online sales by large margins.

As mentioned above, overall expenditures have fallen during the pandemic, but certain groups have taken up some of the slack. Because this year has been much more Netflix and chill than Disneyland and dance party, the respective industries have either soared or sunk. Comcast reported its highest increase in internet hookups in more than a decade, while theme parks like Universal Studios Hollywood remain closed and their revenues have dropped sharply.

According to Tom Braithwaite of the Financial Times, the four big winners of the pandemic have been pharma, cloud computing, eCommerce and gaming. Meanwhile, Macy’s has been nudged out of the S & P 500. This tracks with what others have observed as well. Priorities have shifted and purchases reflect that. With fewer people needing to dress up for work or attend social gatherings, clothing sales have slipped in recent months. Sales from department stores and other nonessential retailers declined by 75% in the second quarter of 2020. Other categories of goods such as groceries, alcohol and home improvement materials increased by around 15%. Since staycation was the only “-cation” of any kind, many folks tried to make the best of it by beautifying the house, indulging in some adult beverages, and buying items that might keep the kids busy and active for a few blessed moments.

Other companies that did well were ones that responded to quickly changing customer needs. Even services like Instacart, which were already set up to swoop in with their grocery delivery services, managed to up their game and meet demand, adding the option to leave items at the door or allow customers to order ahead. Smart marketing and improving the shopping experience have been key to surviving and thriving.

Is There Room for New or Niche Businesses?

While it always helps to have cornered the market and earned billions of dollars in revenue, that doesn’t account for the majority of businesses out there, and that’s okay! In fact, if we can stay on the subject of smart marketing for another minute, let’s take a look at advertising approaches and marketing methods that might attract new and loyal customers in the current milieu.

Since a critical component of advertising is visibility, reaching the eyes and ears of your ideal customers is essential for a new or budding business. Businesses must meet people where they are. And where are people spending a whole lot of their time these days? Online, and on social media in particular.

We are social creatures by nature and when real world options are limited we tend to lean in to alternative forms of connection. The Harris Poll conducted in early May found that 51% of adults in the U.S. used social media more since the Coronavirus outbreak began. Social media companies have been responsive to this trend, adding more gaming features, live streaming, and video chat options. Companies of all sizes can consider how to incorporate some of these features or build up social aspects in the customer journey.

how many people using social media since pandemic 2020

Millennials and Gen Z have increased their use of social media even more than the average person, and have also downloaded more apps for virtual meetings, music, news, and gaming during this time. Also, per The Harris Poll, a third of parents said they increased their usage of wellness apps. So, if the kids are alright, it’s partly because mom and dad are reminded by their smartphones when to take some deep breaths. Tracking the patterns and preferences of the demographic groups you want to reach is key to putting your product or services in their sightline.

Understanding consumer opinion when it comes to advertising and marketing preferences will unlock the potential to retain their business. Selligent, a marketing automation platform, conducted a survey of 5,000 consumers in North American and Europe in July of 2020, and asked several questions regarding marketing practices and consumer preferences. They found consumers do want brands to acknowledge the crisis, though they are wary if it seems they’re profiting off of it without providing a useful product or service.

In these trying times people are seeking value when they spend their hard-earned resources. Respondents expect to see companies share promotions and discounts, with 54% saying sales and deals are the most valuable information they receive from brands. And 50% of respondents rated buyer perks and free products as most likely to make them brand advocates.

In this same survey, around ⅔ of consumers are seeking advice or help for themselves as well as their communities, both in advertisements but also brand behavior. If we’ve learned something during this time it’s that it’s essential to be essential. Can you make a real difference in your customer’s life? How can your services or your product help? Are the people you want to reach stressed out, hungry, lonely, bored? Where would they seek answers and how can you get your message to them? You probably know (from a Psych 101 class, or just from living life) that people want to be seen and heard, so a little empathy and understanding of current conditions can go a long way.

Will the eCommerce Craze Continue?

While some of that stockpiling may have subsided a bit, people are still shopping and spending time online. The pandemic surely accelerated the shift to eCommerce from in-store shopping and many of these new patterns have become too convenient to abandon even when restrictions are lifted and life eventually resumes some semblance of normalcy.

Some stores out there in the real world may be closed for good, and online retailers that made their mark during the pandemic will already have one foot in the (virtual) door. According to Kantar’s global study, over 50% of households with kids report that they are prepared to keep using products and online stores they found while in lockdown. This is good news for eCommerce businesses that have connected with their customers during this time, and suggests that there are ample opportunities to advertise to a public that’s open to online shopping.

More than half of people surveyed in Kantar’s study also believe they’ll keep up their new habits (spending time with family, eating healthier, and exercising more) even after the pandemic is over. Given that U.S. sales of alcohol increased 55% in the third week of March, it may be a bit of a mixed bag when it comes to beliefs versus actual practices. However, whether customers are shopping for beer or barbells, a lot of them will be doing it online.

Even when people aren’t buying, they’re doing a bulk of their research online, whether it be a straightforward Google search or asking a Facebook mom group which meal service app is best. This is important for businesses even when not selling products direct to consumer. You still want to direct potential clients to the services you provide, whether it’s counseling or carpentry.

No one can predict what’s to come, but if Whitney Houston was right and the children are the future, then these stats about Generation Z should provide some insight about where the market is heading and how to attract customers in the near future:

Prioritizing authenticity and diversity, thinking about “social proof,” optimizing for voice commands, and making sure to be on the appropriate social and video platforms will be important for eCommerce businesses moving forward.

In 2019, worldwide e-commerce sales were in the ballpark of 3.5 trillion dollars and are projected to grow to 6.5 trillion by 2022. The past couple decades should lend some confidence to the notion that consumers will carry on this pattern of purchasing goods online. So in other words, eCommerce growth is ongoing and going up.

 

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