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Shopping has changed. The way that consumers interact with brands, research and buy products is unrecognisable today from just one year ago. One of the biggest winners of the last 12 months has been ecommerce. As bricks and mortar brands – many stalwarts of the high street such as Debenhams – have faltered, online retail has hit record after record. Digital has never been as important to brands and consumers alike as it is right now.

We’ve already chartered the importance of activating digital channels after lockdown and tracked the impact of COVID-19 on digital transformation, but looking specifically at the ecommerce sector, there is an abundance of powerful data which underscores how dramatically consumers have shifted to online channels and how vital ecommerce now is for many businesses.

Record online sales growth

UK online retail grew 36.3% year-on-year in 2020, the largest figure since the internet boom of 2007. The highlight of the year for online retailers for the Black Friday holiday weekend, which lifted November figures by 39%.

Adobe figures show Black Friday itself posted new records worldwide, with as much as £6.47 billion ($9 billion) spent on the day in the USA alone, a figure 21.6% higher than the previous 2019 record. Adobe’s analysis interestingly showed that changing consumer shopping habits had contributed, with non-traditional Black Friday purchases such as groceries and alcohol joining the more common electrical goods typically snapped up to mark the unofficial start of the holiday season.

These kinds of figures are not restricted to the Black Friday weekend alone however, with Amazon sellers also recording a 60% uptick in sales on Prime Day. MarketPlace Plus estimated that overall in 2020, third-party sellers collected an additional £68.34 billion ($98 billion) worth of online sales.

Likewise in China, Alibaba’s Singles Day sales on 11 November set records, with a 29% increase on the previous year. The platform says it transacted 583,000 online orders per second during the event, with over 31,000 sellers taking part from countries other than China for the first time. 

Cross-border commerce also soaring

If you have invested in a new ecommerce function there’s additional good news; you may well have found that a range of new markets have now opened up. According to eShopWorld research, cross-border commerce has taken off enormously, with 82% year-on-year growth overall in 2020. This figure hides even stronger performance, with a 141% year-on-year uptick in July, and more than 100% increase in April.

The research shows that more than half of shoppers say they made at least six cross-border purchases in 2020, with factors such as better access to products driving purchase decisions.

One quarter equalled one decade of ecommerce penetration in the US

The first three months of 2020 were especially notable for ecommerce brands operating in the USA, with McKinsey finding ecommerce penetration accelerated by 10 years between January and March as the pandemic started to creep in. This leap forwards comes despite households tightening their budgets in response to job losses and long term economic fears.

One vital finding here is that brands which have invested in offering an elevated customer experience have profited from this ecommerce penetration the most, leaving others lagging behind.

While the figures aren’t quite as enormous here in the UK, online shopping has continued to eat into bricks-and-mortal sales share, with data indicating that some consumers have not gone back to in-store orders even when lockdowns were lifted.

Official data from the Office of National Statistics calculate online retail had a 33.8% share of total retail sales in May. While it dropped to 27.6% in September with the opening on non-essential stores, it has since climbed once again, to 31.4% at the end of November. While slightly below May’s high, this figure is still above pre-COVID levels.

Globally, it is predicted that online retail will account for 17% of all retail sales in 2021.

Bricks and mortar stores moving to online

Some brands with a physical high street presence have been able to embrace the shift to online, even as their bricks and mortar locations were forced to close. Department store John Lewis grew its online sales from 40% of all sales in 2019 to between 60 and 70% in 2020. M&S reported a 47.5% increase in online for Q4 2020 while Next reported a 36% year-on-year increase for the Christmas period.

Key takeaways

  • Ecommerce is sailing a huge wave of demand, with shoppers moving online at the start of the pandemic changing their buying habits for the long term.
  • Online retail penetration and adopted has moved accelerated several years in the space of just a few months, meaning it’s unlikely that it will recede to pre-COVID levels.
  • Online success isn’t restricted to online only brands. A number of traditional retailers have successfully switched their focus and have grown their online sales to account for a substantial portion of online revenues.
  • Shoppers are also flocking to marketplace sites such as Amazon and eBay and consumers are not afraid to look to overseas retailers for desired products, meaning competition could well come from retailers in other markets as well as rivals closer to home.

The most important takeaway however is this; a strong digital presence, a robust ecommerce platform and a commitment to the online user experience have never been as vital to business success as they are now. Adrac is here to help you take advantage of the many opportunities this new ecommerce revolution presents your business, no matter your degree of ecommerce maturity. Contact us now to speak to one of our search marketing and ecommerce experts.

Author Rebecca

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