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Has the Pandemic Boosted eCommerce Traffic?

Updated: Oct 20, 2022


The coronavirus pandemic and its impact on eCommerce business

It's no exaggeration to say that all of us are currently feeling the aftereffects of the coronavirus pandemic in one form or another. Some of us quite profoundly.


Fears still remain at an all-time high, and justifiably so. As of October 2022, the World Health Organization has confirmed over 600 million cases of COVID-19 globally since January 2020. And despite the prevalence of vaccines and the lifting of social distancing restrictions, the coronavirus shows no signs of letting up any time soon.


Our lives have changed ineradicably as a result. Likewise, so has our shopping habits. While eCommerce may have seen a considerable boost in the early stages of the pandemic, the post-COVID landscape is likely to look very different indeed.


So it may be fair to ask: what sort of effect has the pandemic had on global retail eCommerce sales?


The Retail eCommerce Business Landscape

The increase in online store sales and the pandemic's role

Retail was already seeing a fundamental shift towards online shopping over the past fifteen years, with consumers being driven as much out of convenience as a growing technological dependence.

A report issued jointly by Nielsen and FMI in 2019 indicated that 74.7 million American households are expected to be omnichannel shopping from the same retailer by 2025. And while there's hardly a retailer to be found that doesn't provide some form of an online store, it's not surprising that the vast majority of Americans consider Amazon as their first online shopping destination in contrast to a retailer's eCommerce website.


But nothing could have prepared 2019 for the effects of 2020 on online business. The Census Bureau’s Annual Retail Trade Survey recently indicated a 43 percent increase in eCommerce business from $571 billion to $815 billion in the US between 2019 and 2020.


Yet that number pales in comparison to the estimated $1.06 trillion predicted to be spent domestically through eCommerce businesses by the end of 2022. And that's only a small fraction of the $5.07 trillion in global revenue anticipated by the end of this year.


While it's fair to say that the increase in eCommerce business is largely the result of the pandemic, what does it mean for consumer behavior when that increase is driven by need, not by choice?


Pandemics and Consumer Behavior

Disease control for the Avian influenza virus

Pandemics are nothing new. But how consumers respond to them will vary based on the accessibility and availability of shopping options.


Retail eCommerce Sales Before the Pandemic


The most recent avian influenza pandemic in 2009 only resulted in a 2.1 percent increase in domestic eCommerce business compared to the year prior. A seemingly minor increase, but a significant one.


2009 was a different beast than 2022. In fact, mobile commerce was practically unheard of at the time Retail businesses operating an online storefront were limited by both accessibility and general consumer attitudes, allowing Amazon a unique status as one of the most secure and diverse one-stop eCommerce platforms.


It's a status Amazon still maintains to this day, having seen its revenue surge from $115 billion to nearly $470 billion between 2009 and 2022.


But while Amazon may be virtually synonymous with eCommerce, they're hardly the only player in the industry. The 2009 recession helped boost Walmart's eCommerce revenue immensely as more customers turned towards budget-efficient solutions in its wake, driving the retailer's online sales to some $53.3 billion by 2020.


Yet any eCommerce platform is only as good as the brands which populate it. While Amazon native brands launched before the pandemic are drawing no small share of online sales, there's no such thing as a comparable business online exclusive to Walmart. Selling online is always a risky proposition, and there's no predicting that sales on an eCommerce platform will maintain volume off it.


Pre-pandemic eCommerce Business and Brick-and-Mortar Retail
Adapting omnichannel strategies for a physical storefront and an online store

Despite predictions, the rumors of brick-and-mortar retail's death are greatly exaggerated. In fact, it's not even flatlining.


But there has been a cause for concern historically even before 2020. And that concern has only increased since the pandemic.


In 2019, over 8,600 brick-and-mortar retailers announced their closure, immediately following a 2018 report from Credit Suisse predicting a decline in shopping mall traffic by over 20%.


But it's not necessarily eCommerce that is enabling the shift from a retailer's physical presence to an online store. Total US retail sales in 2019 were some $1.4 trillion, of which eCommerce was only 11%. As of October 2022, that number is now only $1.7 trillion, with online marketplaces contributing 14.5% of that share.


As fears of increasing inflation rates and a potential recession continue into 2023, more customers are limiting non-essential purchases and optimizing budget-friendly shopping destinations. This can leave small businesses with a dilemma — chiefly, maximizing visibility among established competitors who are already providing a greater price advantage.


Physical storefronts aren't likely to go away any time soon. But there's one advantage an online store has over a physical store: digital nativity.


As more customers are looking to make the most of their shopping, they're turning their attention towards an online retailer to provide them with discounts and promotions otherwise unavailable through the much costlier marketing real estate of brick and mortar. And businesses who hope to capitalize on this digital-centric push will need to establish themselves as a digital-centric eCommerce business above all — in both marketing, services, and brand narrative.


The Post-Pandemic eCommerce Landscape
Mobile and laptop electronic commerce accessibility

eCommerce sales in the US rose to over 257 billion for the second quarter of 2022 alone; an increase of only 7.4% compared to that same period in 2021.

But eCommerce sales as a whole have also gradually spiked over the past ten years — well over 400%.


Consumer Behavior in Light of the Pandemic

Consumer behavior at a physical store

Consumer behavior is largely a question of routine. And the pandemic has been anything but routine.


As early as 2019, eCommerce was predicted to increase by almost 13 percent to a total of $666.8 billion. But in 2021, eCommerce represented over 21 percent of all global retail business, with over $1.7 trillion being spent on online shopping by US consumers between March 2020 and January 2022.


Traditionally, impulse purchases have accounted for approximately 60% of all retail purchases. Yet despite recession fears, recent surveys indicate that some 73% of Americans are spending over $300 a month on unplanned purchases — an increase of over $125 from just two years ago.


With an estimated 92% of consumers in 2019 converting to online shopping, they're also carrying some of the same purchasing habits with them. But the influence of the pandemic on those shopping habits is a subtle one. The accessibility of eCommerce has encouraged discretionary spending over the past two years, not discouraged it.


As social distancing became the norm, consumers became accustomed to purchasing anything they wanted — whenever they wanted, and however they wanted. Subsequently, algorithm-driven search results became a key advertising battleground, resulting in a 47% growth rate for Amazon's advertising segment in 2020 alone.


But businesses online looking to leverage this uptick in sudden and impulsive purchases need to be aware that there's no such thing as gaming the Amazon A9 algorithm. There are proven methodologies that can give you a leg up on your competition. But ultimately, it's the strength of your product line that gains you traction. All advertising can do is highlight that strength.


Trends in Global Retail eCommerce Sales at the Start of the Pandemic

A global pandemic mapping model
  • According to a survey from IPSOS released in March 2020, China and Italy — the two countries that were most affected by COVID-19 — reported increases in consumers using eCommerce to purchase items normally bought in-store by 50 and 31 percent respectively. The same survey among American consumers indicated a growth of approximately 23%.

  • Survey findings from Digital 360 reveal that some 38% of 304 retailers polled expected upward growth in their business online as a result of the Coronavirus.

  • Preliminary data from Quantum Metric released in March 2020 indicated that eCommerce platforms associated with traditional brick-and-mortar retailers saw an average weekly growth rate increase of 52% and an 8.8% increase in conversions compared to 2019.

The Pandemic and Future eCommerce Growth

A metric measuring online business performance in the eCommerce retail landscape

We're not suggesting that short-term spikes measured over a two-year span are indicative of long-term growth in eCommerce. But retailers have also never faced a global epidemic of this magnitude in well over 100 years.


There's a very good chance that some of them simply won't survive despite their best efforts to embrace online shopping. That's also true for an online store. eCommerce business models are never set in stone. And the Amazon of today could be all but forgotten five years from now.


But there's also an equally good chance that the retail industry will continue to thrive in the most unexpected segments as our familiarity and comfort with technology become more pronounced.


The future remains unwritten and no one can predict just how the degree to which the pandemic will permanently alter consumer behavior. But it's up to all of us to adapt to the future.

Let's just hope it's a healthier one.

 

At Color More Lines, we maximize the growth of your online business based on current and up-to-date trends. Find out more at Color More Lines.

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