If we look back to the beginning of 2020, nobody could have predicted the year we endured. A global pandemic, low interest rates, high unemployment, an action-packed presidential campaign, and so much more. For the world of ecommerce, it has been a year like no other, but some have actually thrived in the turbulent environment. With physical stores closing, Americans turned to the internet for their puzzles, food, video games, toys, and other forms of entertainment, as well as an overwhelming demand for masks.
The move away from physical stores has progressed by five years in 2020 alone. Because consumers haven’t been able to leave home, even those who previously ignored digital shopping have had no other option. The shift to online shopping was inevitable, but 2020 has accelerated the transition significantly.
As a result of the demand for e-commerce, platforms like Instagram and Facebook have adapted to accommodate shoppers. With Shops available on both, consumers can purchase items from their mobile devices without even leaving their favorite social media channels.
Has it been easy for ecommerce sellers? Well, not exactly. With demand moving online, the competition has become more challenging. For both businesses and sole traders, there’s more competition as everybody fights for a slice of the ecommerce pie.
As a result of the increased competition, it’s harder to stand out and even advertising costs are increasing. While some online sellers are enjoying the best year of their careers, others are struggling for attention.
With all of this in mind, what do the numbers say for ecommerce? Let’s take a look!
In general terms, there are a handful of statistics that caught our eye:
There are a few interesting points here, but let’s start with the size of the market. According to the data above, global sales online could reach $4.2 trillion. The reason this is so impressive is that the same number last year was $3.5 trillion.
When looking at the data this year, one of the major questions will revolve around the impact of the pandemic. How big was the role that the pandemic played in the ecommerce market? For us, the biggest statistic was that there were 40% more unique digital shoppers this year compared to last year. This shows the number of new online shoppers from 2019 to 2020.
Usually we think of Cyber Monday as the biggest online shopping day of the year. If you take the last 12 Cyber Mondays, you reach the total spend in April and May online. Normally, this is a relatively quiet time for digital shopping, but the pandemic had people ordering entertainment, home gym equipment, home office equipment, educational items for children, and more.
We’ve seen the overall state of the market, but what about the consumers and the ways they shop as we move into a new year?
As we can see from these statistics alone, delivery plays a pivotal role in the online shopping world. Not only do consumers choose online over physical because of delivery, but they also choose between online retailers using this as a factor. As soon as a company charges for delivery, they face an uphill battle trying to compete with brands that offer free delivery.
When choosing between online retailers, we saw that consumers pay attention to free shipping, ease of return, and cost of return. In other words, we don’t want to pay for a delivery, we don’t want lots of hassle when returning an item, and we don’t want to pay much when returning an item.
As an online retailer, you’ll know that cart abandonment is still a huge issue despite the market being aware of the problem for some time. How do we get consumers to go through with their purchases rather than walking away? Here are some statistics related to cart abandonment:
In 2020, as the world moved online, the biggest reasons for cart abandonment were as follows:
As a business, it’s your job to eliminate these problems and ensure a smooth experience from start to finish. If you can eliminate these issues, you make it easier for all consumers to purchase items in their cart rather than clicking away and forgetting your service. The more of these problems you resolve, the stronger performance you can expect in 2021.
What role has social media played in 2020?
Of all those between 14 and 24, 55% now use social media as inspiration for clothing purchases. Even with Millennials, over half rely on social media for this purpose. Meanwhile, it’s 28% for Baby Boomers and 38% for Gen X.
In general, a significant chunk of consumers across all age groups use social media to contribute to purchasing decisions. As we move into 2021, this is set to become even more prominent as TikTok and other new platforms allow biographies and profiles to include ecommerce links.
What can we learn from 2020? What are the trends that will continue into 2021 and beyond? We expect a mix when it comes to how consumers will proceed with their shopping habits. In one survey, 40% said they would complete some shopping online and some in physical stores once the pandemic was over. However, more people said they would continue exclusively shopping online rather than go back in-store (28% compared to 24%). The remaining 8% said they hadn’t decided whether to stay online or go back to physical shops.
It looks as though technology will continue to infiltrate the market with AR, voice search, and AI. As businesses, artificial intelligence helps us to learn about our consumers and their needs/wants. More and more consumers are now demanding personalization and tailored experiences. To achieve this, we’ll rely on big data and advanced tools to analyze it.
Companies will often use chatbots to talk to consumers and guide them through the buying journey (even when not physically available online). Additionally, consumers will keep picking up their mobile devices and continue to look for more options when buying online.
Sustainability is another concern and one that consumers emphasize as time goes on. We’ve seen how consumers choose between brands, but we didn’t mention that sustainability is growing in importance for consumers. They want brands that consider the environment and offer green packaging/shipping.
Social media is not going away any time soon. Though Facebook and Instagram have a foothold in the market, there could be more selling opportunities on Snapchat, TikTok, and other platforms in the future. Companies who keep these trends in mind will find opportunities to grow while meeting the needs of consumers in 2021!
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