eCommerce Acceleration: Part 1

This article was originally published in 2020 and reflects eCommerce conditions during the first year of the COVID-19 pandemic.

According to eMarketer estimates cited at the time, U.S. eCommerce sales were expected to reach roughly $709 billion in 2020, an 18% increase over the prior year. That represented about 14.5% of total retail sales and a much larger share when categories such as gasoline and automotive purchases were excluded.

COVID-19 Accelerated an Existing eCommerce Shift

The pandemic did not create digital shopping behavior from scratch. It accelerated a shift that was already underway and pulled several years of expected adoption forward. Categories such as grocery and everyday essentials, which had lagged behind other forms of online retail, suddenly experienced rapid digital adoption.

The more durable lesson is that major disruptions can change the speed of adoption without changing the underlying consumer need. Convenience, availability and ease of purchase were already reshaping retail before 2020, a theme explored further in our Retail Convenience series.

Where the Growth Was Coming From

eMarketer projected that digital-buyer penetration would rise to roughly 82% in 2020, bringing the number of U.S. digital buyers above 200 million. One of the largest areas of growth was among consumers age 65 and older, who were adopting online purchasing at a faster pace than before.

• More digital buyers: consumers who had previously avoided online purchasing began using it out of necessity.
• Higher purchase frequency: existing online shoppers bought more often.
• Larger baskets: shoppers consolidated purchases and increased average order size.
• More categories: products such as groceries, furniture and household essentials moved further online.

What the Shift Meant for Retailers

The important strategic question was no longer whether eCommerce would grow, but how retailers would adapt their customer experience, fulfillment, merchandising and marketing to a consumer who moved fluidly between digital and physical channels. Earlier mobile-shopping behavior had already pointed in this direction, as discussed in Mobile Shopping Trends.

For brands, the implication remains relevant: channel decisions should be based on actual consumer behavior rather than assumptions about where consumers “should” shop. San Jose Consulting’s Consumer Insights and Communications work helps identify those shifts, while Convergent Marketing Solutions helps connect the experience across channels.

Continue to Part 2

Part 2 examines how changing digital habits affected the purchase journey, retailer expectations and the competitive importance of convenience. Read eCommerce Acceleration: Part 2.

Key Strategic Takeaways

• eCommerce growth was already underway before COVID-19; the pandemic accelerated adoption rather than creating the underlying demand.
• New buyers, higher purchase frequency and broader category adoption all contributed to growth.
• Retailers needed to evaluate the entire digital experience, including merchandising, fulfillment, mobile usability and customer service.
• The most durable competitive advantage came from reducing friction and making the purchase process easier across channels.

Frequently Asked Questions

Did COVID-19 permanently change eCommerce behavior?

The pandemic accelerated behaviors that were already developing. Some emergency-driven shopping patterns later moderated, but digital purchasing, omnichannel fulfillment and consumer expectations for convenience remained structurally more important after 2020.

What should retailers learn from the 2020 shift?

The central lesson is to watch consumer behavior before technology trends. Retailers that made it easier to discover, purchase, receive and return products were better positioned than those that simply added another digital channel without improving the customer experience.

How should brands decide where to invest in eCommerce?

Investment should follow category demand, customer behavior, competitive pressure and the economics of the purchase journey. Market Return on Investment can help compare those opportunities before larger investments are made.

Sources Cited in the Original Article

• eMarketer, U.S. Commerce 2020
• eMarketer, Frictionless Commerce 2020