Even before the lockdowns and social distancing, ecommerce was doing extremely well. Ecommerce can be credited in part with the slow and steady decline of brick and mortar retail stores. From 2018 to 2019, a series of retail bankruptcies revealed the harsh reality of not being able to adapt to current times. Some familiar names include Forever21, Sears, David’s Bridal, Brookstone, and Payless Shoesource.
Retail has continued on with difficulty, while online stores have seen continuous growth during recent years. According to Digital Commerce 360, 2019 had seen ecommerce penetration grow to 16% up from 14.4% the previous year. While physical stores are still important, many businesses have struggled with creating an ecommerce presence that is up to date. This shows that a strong online strategy was needed before the pandemic had occurred.
Ecommerce sales have heightened during the pandemic, causing an acceleration of the already growing industry. Data from the Census Bureau shows the second quarter of 2020 for U.S. retail ecommerce sales had seen an increase of 31.8% from the first quarter. Lockdowns and other pandemic precautions have caused more people to turn to online shopping. This is to prevent going to highly infectious places like a crowded grocery store. The restrictions in place make a normally carefree shopping experience bothersome for customers.
Many items one would get in-store can be found online without the hassle. Trends show consumers are focusing on essential items and putting off larger purchases. This is related to high unemployment numbers. A number of people without work leads to a decrease in consumer spending. All excess funds will be used for what is necessary like food items, cleaning products, electronics for remote work/learning, and paying bills. Ecommerce has climbed higher, but the spending power of consumers has gone down. Certain products such as groceries have seen price hikes due to an increase in demand from panic buying.
Will the appeal of ecommerce remain after the pandemic is over? A certain change is different shopping trends appearing. As trends have changed due to the pandemic, they will likely switch again as things begin to reach a resolution. To guess what these trends might be, we can look at what is happening now to try to understand the uncertainty.
With the economic issues caused by the pandemic, it is safe to assume people are going to continue to center on essential items in the near future. The economy will take time to recover, which will also slow the return of consumer spending power. Ecommerce has plausibly gained more customers who prefer to shop online instead of in-store. Businesses that are centered around home deliveries likely have gained new customers who previously never used such services. Digital and electronics related companies will have retained growth due to the accelerated use of technology, all made possible by the pandemic.