The global pandemic accelerated growth in e-commerce. Here’s what online shoppers bought, why they’ll stay, and how you can adapt to the new normal.
The COVID-19 pandemic claimed hundreds of thousands of lives as it swept through the United States and Canada. At the time of writing, despite over 160 million vaccinations being administered, variants of the virus continue to pose a threat.
A public health emergency of this scale inevitably leads to an economic emergency. Almost every sector of the North American economy has been affected by the global pandemic, most notably travel and hospitality, where business activity has all but ceased.
As traditional retail struggles, however, many businesses that were able to adapt to digital platforms have seen their online sales soar.
E-Commerce Accelerates from Growth to Boom
Stay-at-home measures designed to combat the spread of the virus forced people to rely on technology for work and school—and it also provided a convenient, Covid-safe method of shopping.
As a result, the e-commerce sector has experienced unprecedented expansion.
E-commerce was already growing before COVID-19 hit. Recent analysis of data from the U.S. Department of Commerce by Digital Commerce 360 shows that, while brick-and-mortar retail hasn’t grown more than 4% since 2005, US online sales experienced consistent, yearly growth of between 13% and 18% over the last decade.
In 2020, as shoppers turned to the Internet for their shopping needs, e-commerce sales hit $791.7 billion, up 32.4% from $598.0 billion in the previous year.
McKinsey reports that the impact of the coronavirus on e-commerce was to catapult market penetration forward by 10 years in the first quarter of 2020 alone.
What Products Are People Buying Online?
According to data collated by Statistica in May 2020, health and hygiene products were first to fly off the online shelves. Shoppers amassed medicines, hand sanitizers, and toilet paper for fear of supply shortages due to the pandemic—accounting for 43% of total online sales.
Not far behind, with 40% of online sales, were household cleaning supplies, followed by food and drinks (31%), and home entertainment products (26%).
Brick-and-mortar stores that managed to adapt to an online way of working were able to capitalize on an at-home clientele eager for home deliveries. Instacart, one of the many emerging grocery-delivery providers, saw an additional 8.32 million orders in March 2020 alone.
What Will Post-Pandemic Shopping Be Like?
Many familiar names in retail have resigned themselves to the fact that the consumer trend toward online shopping is permanent and final proof of what many suspected was already happening prior to the COVID-19 outbreak.
Even that iconic emblem of American enterprise, Disney, is moving to an online shopping experience. The company announced in March 2021 that it will close at least 60 of its retail stores in North America this year—about 20% of its worldwide total—and revamp its e-commerce platforms to focus on digital shopping.
Stephanie Young, Disney’s President of Consumer Products, Games, and Publishing, recognizes COVID-19’s irreversible impact on shopping: “The global pandemic has changed what consumers expect from a retailer… We now plan to create a more flexible, interconnected e-commerce experience.”
This digital ‘stickiness’ by consumers was corroborated by data gathered by McKinsey, which showed those retail categories with higher pre-pandemic online penetration soar “from 37% penetration before COVID-19 to over 80% at its highest.” Despite penetration decreasing as stay-at-home restrictions were eased during the second half of 2020, “it remained at a higher level than before COVID-19, with online penetration in January 2021 at 48%.”
This new cohort of online shoppers also appear to welcome the ease with which they can compare and switch between different retailers.
The same McKinsey report found that, “Of the three quarters of Americans who changed their shopping behavior since COVID-19 began, around 40% say they have changed brands.”
This new-found capacity to shop around online has resulted in consumers discovering many less high-profile e-commerce retailers:
“While growth in consumer goods was driven by large companies at the beginning of the pandemic, we see that brands from smaller companies are increasingly driving growth in late 2020 and early 2021.”
– McKinsey Research
Prepare for Retail’s New Normal
As the world slowly moves from dealing with the COVID-19 crisis to managing the economic recovery, it’s clear the last 12 months will have an enduring impact on the way people shop.
The shift from brick-and-mortar to digital is about much more than simply the way customers make a purchase, however. E-commerce encompasses the entire customer journey, from initial engagement to checkout and beyond.
Online shoppers can be diverted from their purchasing path much easier than in-store shoppers. They can click from one outlet to another, filling then abandoning their virtual shopping carts at the first site of a better offer or more appealing shopping experience.
Why the Shift to E-Commerce Drives Localization
The ubiquitous nature of the Internet means businesses must now cater for a multi-device, multilingual, cross-border customer base. While this presents extra challenges, the potential rewards are enormous.
Building an appealing, personalized online shopping experience that extends across technology and national borders requires a localization strategy. This creates a global e-commerce operation tailored to the requirements of each local language and culture.
Optimizing the online shopping experience for each local market is something Summa Linguae Technologies specialize in. Our e-commerce localization services provide an opportunity for retailers to adapt to post-pandemic consumer behaviors and reap the rewards of global e-commerce.
In years to come, 2020 will be remembered as the year of the COVID-19 pandemic. But more broadly, it will be seen as a turning point where many aspects of our lives changed for good. Nowhere is this more apparent than the seismic shift from traditional retail to e-commerce.
Contact Summa Linguae today to discover how your business can take advantage of the new global retail landscape.
20 E-Commerce Localization Mistakes (and How to Avoid Them)
Common ways that companies make when localizing their e-commerce businesses, and what you can do to get it...
10 Ways to Localize Your E-Commerce Business for China
Looking to do business in the world's fastest growing economy? Here’s how to successfully localize for the...