Digital Commerce 2020: The 6 Year Leap in 6 Months
By Logicbroker | September 17, 2020
As 2019 wound down and we prepped for the new year, the term “2020 vision” was woven into many conversations. What nobody envisioned was that before the end of the first quarter, the entire global economy would forever be changed and the retail industry heavily impacted. While many brick and mortar stores were forced to shut their doors and we all learned what it meant to be “essential” or “non-essential,” eCommerce was about to explode. We’re breaking down the four waves of the Covid-19 pandemic and the direct impact each wave had on the eCommerce ecosystem.
Wave 1: “Nice” to Sell More Online
Prior to March 2020, while the eCommerce industry continued to grow and there was a push to sell direct to consumers online, if you didn’t have a webstore it was not a deal breaker. Sure, the extra exposure was nice, but you certainly wouldn’t go belly-up without an eCommerce store front.
There were plenty of other channels where consumers could purchase your goods.
In January, the ‘who’s who’ of retail and digital professionals gathered in New York City for NRF’s Big Show to talk shop. Industry experts all agreed that omnichannel expansion was here to stay and much of retail growth would be coming from online stores. What nobody predicted that a mere eight weeks later, these predictions would become a reality in such short order.
Wave 2: Covid-19 Disruption
As Covid-19 made its way across the globe, business were forced to close their doors and consumers began to hoard food and pantry staples as there was a huge push to stay home. The global economy was slowed, and buying online became a necessity as grocery shelves were bare and the threat of contracting Covid-19 kept most responsible individuals indoors. eCommerce became the safest option to order everything from food, clothing, and home improvement items. This contributed to a huge spike, with UPS, FedEx, and the USPS scrambling to make deliveries in a timely fashion as order volume surpassed that of the typical holiday surge.
Typical verticals that did not have an eCommerce presence, like liquor stores, partnered with apps to enable online shopping and home delivery. Many brick and mortar stores became fulfillment centers as they enabled online shopping and drive-up pickup and/or partnered with companies like Shipt or Instacart to enable faster home delivery. The rapid shift to embrace digital commerce was apparent, and made a huge impact within the industry.
Wave 3: eCommerce Reality
In the midst of the global pandemic, growth predictions were shattered. There were huge spikes overall in retail, but particularly occurred in health/wellness, beauty and personal care, home improvement and crafts/hobbies. As gyms, spas and salons were temporarily unopen for business, consumers embraced DIY and at-home self-care. A Logicbroker customer that sold home fitness equipment had seen steady year-over-year growth, but saw an explosive increase in orders once Stay-at-Home orders were in place. With Covid-19 outbreaks impacting manufacturing and fulfillment, consumer behaviors and expectations were altered and adapted to the new normal. Gone were the expectations of free two day shipping and having limitless items in stock. The ability to backorder free weights and power drills was just as acceptable as same-day pickup. Extended shipping timelines were acceptable over trekking to stores, battling the line to get in, and keeping a 6-foot distance from other shoppers. Additionally, Amazon suspended Prime shipping for items deemed “non-essential,” which altered the perception that they had an endless aisle, especially since Prime Pantry delivery was cancelled. This drove business to both direct competitors and smaller, relatively unknown webstores as consumers desperately sought out toilet paper, hand sanitizer, flour, and many other goods. As states and schools reopen and we define a “new normal,” one thing is clear – the eCommerce landscape has been permanently altered.
Wave 4: Long-Term Planning
What can we expect in the future of digital commerce? At the end of 2019, Forrester predicted that all retail growth over the next five years will come through either digitally influence offline sales or online. Today, we see that this is very much the case. As the world eagerly waits for a vaccine to hopefully contain Covid-19, these shifts in buying patterns are more likely to become lasting behaviors. Beyond investing heavily in the webstore user experience to provide enhanced engagement, it is imperative to keep ahead of inventory shortages. Manufacturing and shipping companies would benefit from expanding their networks to ensure increased production and faster shipping.
Additionally, the convenience of buying online and picking up either in-store or drive up is most definitely here to stay. Stores should plan on enhancing or implementing this functionality as consumers love the ease and convenience it brings to their busy lives. Physical stores should keep social distancing practices in mind, as there may be lasting, residual fear as consumers spent so much time at home. Moving towards tech-enabled stores/shelves and touchless physical shopping can instill that lost confidence and make your store an attractive place to shop. Plus, this gives a leg up in the case there is another outbreak. From a strictly digital sense, especially since the pandemic drove many out of the cities to the suburbs and countryside, investing in social commerce and virtual try-on technology enables loyal shoppers to still buy from your brand even if they can no longer easily make it to your physical store. Pair this with easy checkout through Apple Pay, Google Pay or PayPal and there is decreased likelihood of cart abandonment since there is both consumer confidence and speedy checkout.
It is an exciting time to be in eCommerce, as the huge growth experienced in 2020 has surpassed predictions and leaped over years to bring us to 2026 predictions. While we lack a crystal ball to specifically see what the future has in store, there is no doubt that the need for digital advances and technological investments are key to keep up with the current retail acceleration.
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