In 2020 brands retailers and consumers have all been hugely impacted due to COVID-19 pandemic. Physical stores closed for months together in the year and brands rushed to fulfil consumer demand via digital sales. Even once stores re-opened due to the government-mandated social distancing there has been a sharp decrease in physical store footfall as many opt to or are forced to stay home and shop online.
eCommerce as a result of the COVID-19 pandemic has been top of the mind for all consumers brands and retailers. We look back at how brands and retailers were disrupted as a result of the pandemic and led to the acceleration of eCommerce in 2020.
eCommerce becomes more important than ever!
The new decade (2020) started off as a normal in January and February. Before the end of Q1 the unimagined happened - a standstill for countries across the world due to the COVID-19 pandemic. It impacted all facets of life - from the way we work socialise shop study use public transport and the list goes. Millions around the world settled into working from home and still continue to do. This also had an impact on the consumer buying habits with a surge in the demand for office peripherals consumer electronics such as mice and keyboards video conferencing tools and mobile devices. Earlier on in the year we discussed the impact of working from home on consumer behaviour.
The seriousness of the pandemic set in and varying levels of lockdowns were imposed across countries. The outcome? Widespread panic set in. Many even began to stockpile essentials such as hygiene products like sanitisers and masks as well as toilet paper. As the world adjusted and continues to adjust to the new reality there have been some significant changes in consumer behaviour as well as an acceleration in the growth of eCommerce.
The closure of brick and mortar stores led to online sales increasing tremendously as consumers were pushed towards shopping online. Not only did we see physical queues forming outside bricks and mortar stores globally but also virtual queues to enter websites.
In the UK ChannelSight saw an increase in online traffic for grocery retailers in March. There was also a huge increase in sales since the outbreak of Covid-19 and a significant shift in both demand and intent versus February. In particular there were drastic increases in the demand for products that have a longer shelf life including pasta and rice. Read more about the increase in online demand for groceries and more here.
RetailerLead IncreaseBaskets IncreaseRevenue IncreaseOcado454%325%365%Superdrug151%212%197%Sainsburys118%233%456%Waitrose682%680%920%Morrisons412%300%450%
Source: ChannelSight Marketing Intelligence Platform. Data comparison period 16th-29th February 2020 versus 1st-14th March 2020.
Online demand surged significantly and retailers were struggling to keep with the demand. In an unprecedented scenario Amazon chose to prioritise essential purchases and cut fulfilment for all non-essential items from March onwards. The increase in online demand also increased pressure on supply chains ultimately forcing retailers to categorise products and prioritise shipments for the products that are deemed as essentials.
The closure of brick and mortar stores led consumers towards shopping online to meet their daily needs. Brands that already had an eCommerce strategy capitalised further on it and others rushed to create a strong eCommerce strategy. Now having a digital-first approach is vital to remain relevant and competitive as eCommerce takes the spotlight in the new normal.
The New Normal
In Q3 of 2020 the new normal began to take shape as new behaviours began to settle in. Some significant changes included working from home and social distancing.
Looking back at 2020 there have been some overarching trends that have formed. A key change has been the accelerated adoption of eCommerce across age groups this past year. This was largely driven by the unavailability of or limited access to brick and mortar stores which has forced consumers to shop online.
In the graph below we map out the acceleration of the eCommerce activity. As we discussed above most of Q1 2020 started off as normal with a small increase in online sales. However in Q2 eCommerce growth was steep with a jump of 30% in YoY online traffic and a 142% increase in online sales YoY. The upward trend remains from Q1 till the end of the year.
The permanent shift and acceleration of eCommerce is evident from the graph above. This is a result of a number of factors including the varying levels of lockdowns across the world. Those that would previously shop in-store have now been pushed over to shopping online and are likely to continue to shop online.
What's next for eCommerce in 2021?
Going into 2021 it is clear that brands and retailers need to prioritise their eCommerce and digital strategy. The growth and adoption of eCommerce have been tremendous in the past year and is evident from the data shown above. However the competition will also increase as brands and retailers will fight to win a larger consumer share in the online space. This means it will be important to provide an optimised eCommerce experience for consumers with a consumer buying journey that reduces competitive distraction.
Optimising your eCommerce journey and ensuring that you have the right solutions in place is key for brands and retailers. ChannelSight has a team of experts that can help implement solutions that can enhance your eCommerce strategy. Contact us today to book a demo with our team of experts.