eCommerce Acceleration: Part 1
The following post is part 1 of a 2 part series.
According to eMarketer, eCommerce is expected to reach $709 billion in 2020 which represents a 18% increase from last year. This equates to 14.5% of total retail sales which is a significant jump from 11% last year. If you exclude gas and auto category sales which are predominantly offline purchases, the number is closer to 20% of retail sales. It’s important to note that this growth is not due to an increasing pie but rather a drastic shift in channel behavior. In fact, total retail sales are expected to drop by 10% due to a 14% reduction in expected Brick-and-Mortar sales. Before COVID, total retail sales were expected to grow a modest 2.8% for 2020.
COVID-19 did not change our behavior. It merely accelerated the inevitable pulling the ecommerce baseline forward 5 years. That battle for convenience was already waging before and digital purchasing had permeated most categories with the exception of Grocery and everyday essentials which lagged behind drastically.
Where is this growth coming from? Digital penetration is expected to increase to 82% (from 80%) bringing the total number of digital buyers over 200 million. Of these new buyers, the segment driving the largest share growth is 65 and older. However, this increase in pure numbers is not enough to add up to yield the highest uptick in eCommerce sales. If you dig deeper in the numbers, analysts are seeing an increase in consumer spending. This increases primarily driven by more habitual buyers, higher basket sizes, and purchasing behavior across more product categories online like furniture and groceries.
Stay tuned for part 2…
Sources:
- eMarketer, US Commerce 2020
- eMarketer, Frictionless Commerce 2020
