As the coronavirus’ impact spread throughout the U.S., we shared our observations and recommendations on the MPS blog. Now that some time has passed, we’re able to analyze more data and gain a better idea of what lies ahead for e-commerce. The first half of 2020 has been unpredictable and will likely shape brands’ strategies for years to come. Being informed is the first step in being prepared and getting back on track. Continue reading for more insight into the future of e-commerce and its impact on brands.
As mentioned, COVID-19 has had a significant effect on the e-commerce industry, as well as within traditional retail. For both, there have been significant fluctuations in consumer spending versus previous forecasts.
According to eMarketer, instead of growing by the expected 2% year-over-year, brick-and-mortar retail spending has declined by more than 10% year-over-year. This dip can be directly correlated to COVID-19 and associated closures. However, on the e-commerce side, spending is now predicted to increase by 18%. This projection is 6% more than eMarketer's original prediction made in December 2019.
U.S. consumers have been steadily moving away from brick-and-mortar and toward e-commerce. But COVID-19 has forced brands and marketplaces to transition faster than anticipated. With that said, although projections for e-commerce are positive, brands faced a number of challenges.
As an agency that supports brands on Amazon and other online marketplaces, we firmly believe e-commerce hasn’t been optional for some time. But now, it’s ever-apparent consumers are willing to purchase a wide variety of products online versus in-store. In the chart below, a number of categories are not only growing their e-commerce sales but capture a greater percentage of total retail.
These figures represent a shift in how shoppers are buying products. With that, having a strong e-commerce presence and strategy is crucial. For the remainder of 2020, and for years to come, we expect brands of all sizes and across all categories to elevate their existing efforts to meet customers and adapt to new shopping habits.
Many online marketplaces have grown during the coronavirus outbreak. However, Amazon is still the clear leader. In fact, Amazon earns more e-commerce sales than the top 10 combined, according to eMarketer.
Walmart.com earned the second spot on the top 10 list and has grown significantly over the past year. In addition, the corporation has a renewed focus on its e-commerce marketplace. With that, more MPS clients have begun to embrace Walmart.com as part of their overall e-commerce strategies. These brands have benefitted from diversifying their investments and expanding their online presence. Similar to overall trends in e-commerce and retail, we expect this mindset to strengthen among brands.
The future of e-commerce is unpredictable, but the industry has taken on a new trajectory. It's worth staying informed on how current events impact your business and the overall industry landscape. This way, your brand will be prepared to adapt as needed. The next steps could be adding another marketplace to your strategy or trying an entirely new tactic. Regardless of what your brand's unique path forward looks like, we're here to support you. Feel free to schedule a free consultation or contact us with any questions.