It’s a good time to run a business online.
According to Adobe’s latest Digital Economy Index report, eCommerce shopping in April and May exceeded 2019 holiday activity by 7%.
In fact, online sales posted a $52 billion gain from the same period a year ago.
Going Cyber Amidst COVID-19
The recent COVID-19 pandemic shut down brick-and-mortar shops. That’s led many SMBs to change their business models and move to the online space.
Well, that plus the fact that Amazon is offering them up to $1 million in lines of credit. The company is doing that with the help of its financial partner, Goldman Sachs.
And that’s not the only partnership that’s wooing business leaders to the Internet. Walmart recently joined forces with Shopify to give SMB sellers access to the 120 million consumers who shop on Walmart.com every month.
Walmart expects to add 1,200 Shopify sellers this year.
Other online marketplaces, such as eBay, Google Shopping, Facebook Marketplace, and Etsy also offer attractive platforms for businesses that want to sell products in cyberspace.
Growing Market Share
Before the pandemic, ecommerce in the U.S. accounted for somewhere between 12% and 16% of all retail spending. Unsurprisingly, that percentage grew during the lockdowns.
Consumers still need to buy products even if they can’t go to the store.
Some people think that during the upcoming holiday season, digital commerce will account for as much as 20% of all retail spend.
That’s because five months from now plenty of at-risk folks will choose to do their shopping online rather than roll the dice with a virus going around during the cold and flu season.
Also, some lockdown guidelines will still be in force.
Buy Online, Pick Up In-Store (BOPIS) Flattening
At the height of the pandemic, some consumers opted for a hybrid approach to shopping. They ordered products online and picked them up in the store.
Industry analysts call that BOPIS. It stands for “buy online, pickup in store.” According to Adobe, 23% of online consumers prefer BOPIS.
In April, year-over-year BOPIS grew at a whopping 200%. In May, BOPIS growth stood at 195%, and we can see it is on a decline in the Adobe Analytics 2020 ecommerce report.
As local governments ease lockdown restrictions, you can expect BOPIS growth to decline even further.
Fierce Competition
Another interesting stat from the May digital sales data: Walmart ecommerce revenue topped eBay for the first time ever, according to the eMarketer 2020 Ecommerce Report.
Typically, eBay stands at #2 in the online shopping space behind you-know-who. Now Walmart is taking market share.
There’s little doubt that we’re entering a phase of cutthroat competition in ecommerce. Giants like Walmart and Amazon stand to do well because they can afford the investments in optimization and operations.
Here are the 2020 ecommerce sales figures by company:
- Amazon ($269 billion)
- Walmart ($41 billion)
- eBay ($31 billion)
- Apple ($24 billion)
- Home Depot ($13 billion)
- Best Buy ($10 billion)
- Target ($10 billion)
- Costco ($9 billion)
- Wayfair ($9 billion)
- Macy’s ($6 billion)
Shoppers Going Mobile
Another eye-opening stat from Adobe: smartphone sales accounted for nearly 40% of all ecommerce spend during May.
Even more surprisingly, the 2020 ecommerce report says that people who shopped online for the first time did so from their smartphones.
Think about it. Those folks won’t even need to “make the transition” from shopping on a desktop to shopping with a smartphone. They’ll go straight to mobile shopping by default.
This is further confirmation that mobile is everything.
Wrapping It Up
If you’re running a traditional brick-and-mortar establishment, then you almost certainly took a hit during the pandemic. Use that as a learning experience to think about how you can move to an online model.
You might opt to support BOPIS. Or you might just package and ship your goods to people who order online.
Sit down with your advisors and discuss your options. Then, make the necessary investments so you can stay in business when people want to shop from home.
