How did the ecommerce industry have a rapid 5x growth post-pandemic?
The COVID-19 pandemic has reshaped the world with a ‘new normal’ across several industries. It has left a long-lasting mark on the consumer landscape. Within weeks years of change were adopted – offline shopping moved to online. Stallion Market Research has observed a 5x shift away from physical stores to digital shopping during this time. There has been a significant decline in sales of nearly 20% to 25% during the first quarter of 2020, which grew to 70% to 75% in the second quarter of department stores. Products that were mostly bought from department stores are now Ecommerce industry. Availability, convenience, and speed are the top consumer expectations during the ‘new normal.’
There is a refinement in categorizing consumer goods as ‘essential.’ For example, clothing has declined in importance with the prominence of social distancing, work from home, and schooling from home. Stallion Market Research has observed that groceries, alcohol, and home improvement materials had accelerated by 12%, 16%, and 14%, respectively. When retailers were forced to close during the lockdown period, e-commerce reached its all-time high between 16-17% of total global retail sales.
E-commerce explosion and its drivers
E-commerce sales continue to boom against departmental stores worldwide. Stallion Market Research has seen the fastest growth in emerging markets where ease of mobile phone ownership is redirecting consumers to purchase online. There have been advancements in lifestyle and consumer spending habits. Consumers worldwide are still wary of buying in-store, leading to a surge in online purchase demands. Though the dynamics can differ across countries, health, hygiene, home essentials, and food and beverages have the top-most place in online product categories. Convenience, simplicity, and speed have been common aspects of consumer preferences while buying online. Globally, the share of cash transactions has fallen from 85-90% to 75-78% in the past five years with the emergence of e-commerce markets. Adapting to the evolving e-commerce trends is critical to developing your business. Let us look at the main drivers responsible for global e-commerce growth.
Increased Mobile Device Usage
The global rise in mobile device usage has been a primary contributor to the rapid growth of e-commerce. It has simplified the buying and selling process over the internet with flexibility and passiveness. Fintech companies have emerged and transformed payment methods with secure and simple transactions. E-commerce businesses require these secured payment procedures to integrate with their mobile applications. Customers are most available on their mobile device, and e-commerce has simplified the shopping experience in just a few taps.
Data-driven Ecommerce Strategies
Data and insights about ecommerce business performance have also contributed to the rapid growth. With the observations and tracking of consumer preferences, businesses are dedicated to providing a consumer-focused experience. The observations and consumer insights further help mold retail e-commerce businesses to enhance and grow their operations and global outreach.
Enhanced Customer Experiences
Personalization is critical for customer engagement. Offers and discounts are usually used to attract customers. Suggesting products based on their interest and preferences also helps in improving sales. Building applications that understand user behavior and simplify the shopping experience boosts Ecommerce industry usage.
Dynamic & Optimized Cost
The low cost of running an e-commerce business is an essential factor for its growth. Unlike departmental and brick-and-mortar stores, it is cheaper to establish an online store. It eliminates the in-store experience by providing an online product catalog. Ecommerce stores are accessible globally over the internet. Digital presence is more critical here than a physical presence.
Benefits of an E-commerce Platform
Activating your e-commerce store using an e-commerce platform can help you in the following ways:
Global Outreach: Use a single platform to sell products anywhere worldwide. Ecommerce industry platforms enable eCommerce stores to establish their business with online marketplaces and social media.
Effective Marketing: E-commerce platforms provide built-in marketing tools to create, execute, and analyze digital marketing campaigns. You can even build and promote your store through Facebook and Google advertisements.
Store Management: A single platform with a dashboard can provide details about orders, shipments, and payments on the go. These insights can even be used to manage and grow your business globally.
What are the fundamentals of an e-commerce store?
Search Engine Optimization
A robust digital presence is most important for an e-commerce store. While advertising and social media can direct traffic, organic traffic is also critical for a long-term establishment. Staying on top of Google’s algorithm builds trust and authority for your store. Investing in improving online customer reviews helps in boosting your search engine rankings.
According to Stallion Market Research statistics, 1 in 5 adults in the U.S accesses the internet with smartphones. Nearly three-quarters of the world is forecasted to be dependent on smartphones by 2025. With the rise in mobile phone users, Google has “mobile-first” indexing, which decreases the ranks of websites that are not mobile optimized.
Stallion Market Research predicts that the future of e-commerce growth will revolve around fast-moving consumer goods (FMCG), such as groceries and toiletries. The subscription-based retail models will enhance the rapid growth of the eCommerce industry. It capitalizes on the marketing thumb rule of customer retention, which is cheaper than customer acquisition.
Stallion Market Research forecasts that by the end of 2021, 80% of internet traffic will be from videos. Video marketing is critical for e-commerce as it provides a complete look at the products sold. It bridges the gap between physical and digital stores with realistic visual representations. It builds a connection between customers and your brand to drive sales, authority, and confidence. Stallion Market Research predicts AI-engineered video marketing to be the next stage of marketing.
Omnichannel retail models include in-store, online, and even between (click and collect) shopping experience. It offers more than just a transition from brick and mortar to ecommerce. Providing a seamless customer experience is essential for assured growth. Understanding and analyzing customer interactions are predicted to be the subsequent extensive development in the business intelligence infrastructure.
Voice Search & Assistance
With the increased popularity of voice assistant technology, Ulta-optimized customers are using voice search for purchases. Though this technology exists, it requires optimization and in-depth consumer research to scale. Voice command is yet to reach the mainstream choice though Stallion Market Research predicts it to be a trend in the near future.
The rapid boom in e-commerce due to the pandemic has set a high base for future growth. As per the U.S. retail e-commerce report for Q2 2020, the industry reached USD 200-215 billion. E-commerce also contributed around 15-1% of total retail sales in Q2 from 11-12% in the Q1 of 2020, reports Stallion Market Research. The pandemic boosted ecommerce growth by nearly 5x by changing customer purchasing patterns ahead of time. With the increased accessibility of the interest, the e-commerce sector continues to evolve and develop. Traditional retail businesses also migrate to the e-commerce space, which expands their customer outreach and stays in the competitive market. Customer experience is critical to e-commerce stores where convenience, accessibility, and speed play an important role. The increased internet accessibility, ease of transaction, product availability, personalization, and absence of constraints of physical presence and interactions make online shopping the most preferable to consumers. Stallion Market Research can provide in-detail insights and analysis of the e-commerce sector. Write to us for more information.