The rapid growth of ecommerce is perhaps the only news of 2020 that isn’t shocking. With the coronavirus pandemic keeping most of us indoors, 60% of our interactions with companies are now online. In the first 10 days of November alone, US consumers have already spent $21.7 billion online – that’s a 21% increase year-over-year.
But even without the effects of coronavirus, ecommerce was set to be on the rise in 2020. Internet sales have made up an increasing percentage of total retail sales year-on-year, growing from 7.3% to 19.2% in Great Britain alone from 2010-2019.
Between February and April 2020, internet sales skyrocketed from 19.0% of total sales to 30.2%, which should come as no surprise. But there’s a lot to learn about the digital-first world we’ve suddenly found ourselves in – and the more you know, the more you can make the most of this new retail climate.
The pandemic is changing the way we socialize and travel. It’s expected to change the way we work. And it’s already changed the way we buy: 62% of US consumers shop online more now than before the pandemic, and one UK survey even found that 74% of respondents across all age groups now feel comfortable buying products online because of the coronavirus outbreak.
Because of the pandemic, ecommerce sales have grown substantially in comparison to the rest of the retail industry – 36% of consumers shop online weekly since the outbreak of COVID-19, as opposed to 28% before.
However, ecommerce hasn’t been spared from the overall decline in retail sales in light of the pandemic. US ecommerce sales are expected to jump by 18% in 2020, but the same report predicts that total retail sales in the US will decline by 10.5%.
Tim Clarke, Director of Sales and Marketing for SEO directory site SEOBlog, told us that the ecommerce businesses he works with have seen a definite increase in demand due to this year’s lockdowns:
While the frenzy has simmered down over the past couple of months, we are still expecting a massive influx in sales as the holiday season draws near, based on the engagements we have been experiencing through social media channels and the trends in our ad campaigns.”
Prepare for Black Friday and Cyber Monday in advance (we’ll be sharing some tips from small business owners later on). Increased demand could mean increased strain on delivery services – especially if there’s any winter weather on the way. Speak to your couriers in advance, and find out if they can collect on the 27th and 28th of November. And for your own convenience, package as many products as you can in advance of the actual weekend!
One unexpected industry that has seen a major shift to online purchasing in light of the pandemic is food and drink. Before COVID-19, just 9% of consumers shopped for groceries exclusively online. Now, 63% are buying more groceries online or by phone than before, and 86% are likely to continue to shop online or by phone when social distancing measures are removed. In the UK, average weekly internet sales for groceries more than doubled from pre-COVID levels.
During the pandemic, 60% of consumers have prioritized the purchase of essential items like groceries, while 3 in 10 consumers have also switched to brands that offer lower prices. But what non-essential retail items have still managed to fly off the shelves?
Ecommerce Sales in 2019
- Global e-retail sales surpassed $3.5 trillion
- Amazon alone accounted for over a third of all ecommerce in the US
- An estimated 1.92 billion people purchased goods or services online
- The holiday season drove $142.5 billion dollars in online spending from November 1st to December 31st – a 13% increase year-on-year
Global shoppers drove a 75% growth in digital commerce in Q2 2020 over Q2 2019, and even outperformed the holiday shopping season of 2019, which was considered one of the best sales seasons in recent years.
Pre and Post-COVID Forecasts for 2020
By now, we know that the pandemic has changed the way we shop, and caused a massive pivot to online retail. But what did the year look like before COVID-19 changed the picture? When asked in 2019, 46% of consumers in one PwC survey expected to spend more money over the following 12 months.
Now, Merkle predicts that in the last quarter of 2020, 79% of consumers will continue to spend more conservatively than they did before the pandemic. That said, ecommerce is still set to lead retail revenue: Online holiday sales are expected to reach $189 billion, which would mean a 33% increase year-on-year, while in-store sales could decline by 6.6%.
What About Ecommerce After the Pandemic?
In a survey conducted by Salesforce, 61% of respondents say they expect to spend more time online after the pandemic than before it hit. Meanwhile, 60% say COVID-19 has changed their relationship with technology.
A whopping 96% of Americans have made at least one online purchase in their life, and 80% have done so in the last month. But the US actually comes second on the list of the world’s largest ecommerce markets:
Ecommerce clearly integrates foreign economies, too: 57% of online shoppers have made a purchase from an overseas retailer. Let’s see that figure broken down by region:
The borderless nature of ecommerce works well in today’s globalized world. The two top markets – China and the US – have large numbers of cross-border online shoppers: 149.42 million and 82.72 million, respectively.
For ecommerce stores selling both locally and internationally, being able to accommodate different payment methods should be a top priority. Digital wallets, credit cards, and debit cards are the top three ecommerce payment methods worldwide.
Let’s break that figure down by country:
The Rise of Digital Wallets
Digital wallets (also known as mobile payments or e-Wallets), like PayPal and Apple Pay, are on the rise as a preferred payment method – particularly in the APAC region. This is due in large part to the popularity of digital wallets in China: 81.1% of smartphone users in China use them, compared to 29% in the US and just 19.1% in the UK.
Given that China is currently the largest ecommerce market in the world, it’s no surprise that its two biggest mobile payment players – Alipay and WeChat – both recorded over 1.1 billion active users in Q3 2019. For context, that’s almost the entire population of China, which was recorded at 1.4 billion people in 2019!
But digital wallets are on the rise in the West, too. Mobile payment usage jumped by 77% in North America and 123% in Europe between 2015 and 2018.
Know which payment gateways your ecommerce website can accept, and know which gateways your customers prefer. The best ecommerce website builders offer integrations with all of the major payment gateways, and customers in the US will be looking for top platforms like PayPal, Stripe, and Apple Pay.
Cart Abandonment Rates
Knowing how site visitors prefer to pay is only important if you have paying customers in the first place – which brings us to the issue of shopping cart abandonment. Abandoned carts happen when a customer adds an item to their cart, but then leaves the website without completing the purchase. Over three quarters of shoppers will do this – check out the global cart abandonment rates by country for 2019:
Avoid blindsiding customers with unexpected costs during the checkout process. While sellers often can’t afford to waive shipping fees or other additional costs, what you can do is allow customers to calculate the total cost of their orders at the beginning of the checkout process. This way, there are no hidden surprises later.
In a 2018 study based on 900 billion web visits, 58% came from mobile devices, while 42% came from desktops. And when asked how often they bought products using various shopping channels, respondents in 2019 chose mobile devices 30% of the time, and PCs 28% of the time.
In Q1 2020, mobile ecommerce traffic grew by 25% across all industries, with mobile phones representing 56% of total order share and 71% of total traffic.
That said, mobile doesn’t come out on top in every ecommerce metric.
And when it comes to global market share, mobile and desktop devices are nearly tied at 48.62% and 48.88%, respectively.
Mobile shopping has been on the rise for a while. However, even though more than half of all time spent on retail websites takes place on a mobile device, sales made on desktops are still worth more money on average. Customers also order more products on desktop than on mobile, with item counts per order 24% higher on desktop devices.
So, Why Is Mobile Ecommerce Important?
Desktop devices lead in sales, but mobile devices lead in traffic – Google even added a site’s mobile-friendliness to its search criteria in 2018, reflecting the big turn towards mobile browsing that we’ve already seen. And this popularity means that mobile browsing is starting and ending more consumer journeys than ever before.
Shopping is an increasingly omnichannel experience – the frequency of multi-device customer journeys is estimated to be between 41% and 65% of all purchases made online. Even the best free ecommerce website builders allow you to design mobile-friendly ecommerce websites.
Mobile Ecommerce During COVID-19
45% of consumers say they’re using their mobile phone more as a shopping channel since the pandemic began in March.
In its May 2020 analysis of ecommerce data from 60 countries, PPRO found that Sweden leads the pack, with 60% of its ecommerce shopping being conducted on a mobile device. China follows close behind with 59%, while the UK and US conduct 55% and 39% of ecommerce shopping from mobile devices, respectively.
Mobile Ecommerce in the Future
Pre-pandemic estimates predicted that mobile purchases would be worth $3.56 trillion by 2021, making up 72.9% of total global ecommerce spend.
Like mobile browsing, new technology trends – such as personalization and localization, voice shopping, and chatbots – are also having a big impact on the customer experience.
By “customer experience,” we mean all of the interactions between a business and a customer that shape their relationship. This involves everything from web design to shipping, and it’s an important thing to invest in – 64% of customers say it’s actually a more important factor than price.
Personalization and Localization
In ecommerce, personalization means delivering more personal experiences to customers by tailoring their recommendations and offers based on factors like their browsing behavior, purchase history, and geolocation.
Localization means tailoring a website to a customer’s IP address, so that it reflects the customer’s native buying experience in terms of language and context. If you sell internationally, this is an important way to compete with local sellers in overseas markets.
Voice control devices, such as smart home speakers, are increasing in popularity all over the world. There are expected to be 8 billion voice assistants in use by 2023, which would be up from 2.5 billion at the end of 2018. A report by OC&C Strategy Consultants even predicts that voice shopping spending will grow to over $40 billion in 2022 alone.
Why is this such a big deal for ecommerce? Because according to a 2019 report from Microsoft, 40% of consumers surveyed in the US, UK, Canada, India, and Australia had used voice technology to make online purchases – that’s a major share of the market!
In fact, one in five smart speaker owners use voice commerce. And COVID-19 could easily accelerate the growth of voice tech: 52% of voice assistant users say they use the technology “several times a day or nearly every day,” up from 46% before the pandemic.
Voice assistants are an up-and-coming giant in the ecommerce industry – so it’s important for merchants to be prepared. When Adobe surveyed 400 business decision makers in 2018, 91% said they were already making significant investments in voice technology. But it’s important to plan for new challenges as well: Because voice technology devices are still so new, they’re more susceptible to security vulnerabilities and fraud.
Chatbots are a favorite feature among Millennials (those born between 1980 and 2000), who choose live chat as their preferred way to contact brands. Millennials have a spending power of $10 trillion over their lifetimes as consumers, and together with the younger Gen Zs, they make the most purchases online of any age group – so chatbots are an important tech trend to keep on your radar.
It’s clear that Millennials like chatbots – but how does everyone else feel about them?
We’ve seen how chatbots can be convenient for customers. But they can be beneficial for merchants, too: Chatbots could save companies up to 30% in customer service spending, and companies in banking and healthcare alone are expected to save $8 billion by 2022 by using chatbots.
Multichannel Marketing and Social Media
Multichannel, or omnichannel, marketing means using a sales approach that integrates the customer experience across various channels, including text messages, social media platforms, and emails.
Today, the average number of social media accounts per person is 8.6 (a figure that’s grown 79.16% from 2014 to 2020), and US households each own an average of 11 connected devices – meaning it’s important to reach customers across as many of those accounts and devices as you can.
55% of online shoppers made a purchase through a social media channel in 2018, and in 2019, 87% of online shoppers believed that social media helped them make a purchase decision. Instagram alone attracts 70% of consumers looking for product discovery, while 77% of Pinterest users have discovered a new brand or product on the platform.
Customers can also purchase products directly through social media pages, which 30% of consumers say they would do. Some merchants are well aware of this trend: One in four business owners are already selling through Facebook.
And hey – remember when we talked about China as a massive ecommerce market? Social media purchases are already the standard there, with 55% of users buying goods or services directly on a social app.
92% of consumers are more likely to trust non-paid recommendations than any other type of advertising, which is why social media plays such a big role in customers’ buying decisions. But there are also other kinds of social proof that you can use to your advantage, including customer reviews – 91% of customers from the ages of 18 to 34 trust online reviews just as much as personal recommendations.
Daniel Foley, director of his own London-based SEO consultancy, told us just how beneficial online reviews will be for ecommerce sales this holiday season:
This can be especially useful for companies who aren’t well known and who are competing with big brand names. Many people have had experiences with online companies selling items that aren’t quite what they promised, so making this feedback instantly available can help reassure that they will get what they are ordering.”
It’s time to talk about the biggest retail weekend of the year.
Black Friday and Cyber Monday are in the spotlight as we wonder how the coronavirus pandemic will impact purchases. But it’s possible that some trends from years past may still check out…
While the UK has yet to match the US in online sales, both markets have shown a steady increase year-on-year.
This year, more than three-quarters of US consumers say that crowded malls would deter them from shopping in person, and 41% hope to rely on online shopping instead. The UK just about matches Americans on this view, with 71% of Brits reluctant to shop in-store this holiday season.
Black Friday in the US
While we’re used to thinking of Black Friday as a day full of doorbuster in-person sales, it’s actually been trending towards ecommerce in recent years. In-store Black Friday attendance fell by 4% from 2016 to 2017, and fell a further 9% from 2017 to 2018.
One survey conducted by the National Retail Foundation has found that in 2020, US consumers plan to spend about the same amount on holiday gifts as they did in 2019. The same survey found 53% of shoppers say they plan to spend more this year on non-gift holiday items (such as decorations) because they won’t be travelling for the holidays.
Black Friday in the UK
In 2019, 42% of adults in the UK planned to take part in Black Friday and Cyber Monday. This year, that figure has dropped to 39%. However, Brits are still expected to spend an estimated £6 billion over both holidays in 2020, and those who do plan to take part will spend 18% more on average than last year. So in short, turnout will drop in 2020, but total spending across the UK is expected to grow.
We know Black Friday and Cyber Monday are the heavy-hitters, but it’s safe to say that Small Business Saturday will also be taking place online this year. If you’re a local business, start thinking about how to get your community excited about your services. It won’t be a waste of effort – American shoppers spent an estimated $19.6 billion at independent retailers and restaurants in 2019.
We’ve had to do a lot of adapting in 2020 – and making a few mindful adjustments to your ecommerce strategy this holiday season could pay dividends. For inspiration, we asked a few ecommerce merchants what their plans are going into Black Friday and Cyber Monday this year.
Use More Discount Codes
Michael Anderson, of the custom mapmaking company GeoJango, told us how discount codes elevated his Black Friday strategy.
“Our most successful tactic last Black Friday/Cyber Monday was to run discount code sales throughout the weekend, and to promote them through live chat on our website.
Basically, we had one discount code for Black Friday, one for Small Business Saturday, and one for Cyber Monday. The fact that we used different discount codes for each specific event helped to create a sense of urgency among our users, and we saw our ecommerce conversion rate skyrocket.”
Discount codes are a surefire way to boost sales any year, but they may be especially effective in 2020. Calloway Cook, owner of the herbal-extract supplement company Illuminate Labs, told us he’s used discounts to adapt to a downturn in sales due to COVID:
“Let’s face it – most consumers are struggling financially at the moment. If you’re a high-end brand, it’s going to be tough to generate as many sales as you did last year.
We started offering an 80% discount on first-time subscription orders in a banner on our website, and saw a surge in recurrent revenue. This has been really crucial in helping us ride out the economic storm of 2020. We’d recommend any retailer selling at a high price point to try out this strategy if you have the profit margins to support it.”
There are tons of small ways to drum up anticipation before and even during your Black Friday sales. Samiksha Desai of Yummy Tummy Recipes said using a countdown clock on her client’s landing page increased conversions by 11%, while Karl Robinson of Logicata looks to the future to grab his customers’ attention:
“While Black Friday and Cyber Monday are all about discounts, offering a future discount through your purchase can really entice customers. For instance, a deal where you buy today, and receive a future voucher for 10% off on your next purchase, can really grab attention and allow people to continue the savings past one specific point. Plus, you could also be growing and strengthening your customer loyalty.”
Ben Bailey, of ecommerce strategy site Ventured, has learned that when it comes to customer engagement, simplicity is key:
“For us, one site-wide discount worked better than multiple discounts. Make things easy for your customers – buying from you shouldn’t require a calculator.”
That said, Bailey also encourages a concrete approach to email marketing:
“Email is king. Utilize your email list – readers are warmed up to you already, and have opted in. The holidays are the best time to blast your list, and don’t be afraid to email every day, or sometimes twice a day during the big sales. Last year, we did over 100k in sales from Friday – Monday. 40% of that came from email alone.”
Prepare Your Website
Even in today’s world, 46% of American small businesses still don’t have their own website – so if you’re reading this, you’re already on the right track. If you’re still preparing your website, you can find out how to build an online store and explore the best small business website builders.
But some Cyber Monday veterans can offer a few tips to handle the influx of website visitors you’ll likely get this holiday season.
Laura Fuentes of TV and internet company Infinity Dish says website speed can make or break your Cyber Monday sales.
“It’s best to make sure in advance that your site can handle the amount of traffic that will be pouring in on Cyber Monday. Shoppers can get really frustrated by slowed screens and glitches.
Unless a shopper is really intent on purchasing a specific product from your business, they will move on as soon as a glitch happens and look for similar deals with your competitors.”
Ecommerce sales were undoubtedly on the rise before coronavirus caused them to skyrocket this year, but now the future is decidedly digital.
There’s no telling for sure what we can expect after the coronavirus pandemic, or when that day will come – but ecommerce statistics from both before and during the COVID-19 outbreak suggest that online shopping is where our attention should be as we try to look ahead.