Future Gazing: eCommerce Is Here To Stay

August 20, 2020

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As we adjust to post-COVID-19 life, we are settling into an unanticipated reality of face-masks, social distancing, and nostalgia for aeroplane food, of all things. While the current crisis has taught us that our assumptions about the future will always be built on shaky ground, it has also proven that some recent innovations and predictions were incredibly prescient. Brands like Ocado, Uber Eats, and Amazon are thriving based on the bets they made on the universal human preference for convenience and ease, while others are getting further confirmation that they should have moved online years ago. In this era of uncertainty, it’s more important than ever to understand just where we are, and where we are headed. So let’s take a long look at the future of eCommerce.

While many marketers and brands have been touting eCommerce’s growth and potential for years (Adimo among them), the fact is growth hadn’t gained runaway momentum until the pandemic hit. Online sales were an increasingly important sector of the market, but they still made up a small fraction of overall transactions. Statista reported that eCommerce would make up just 14.1% of global sales, while in the US that number was just 11.4% in 2019. But with the large scale closings of brick and mortar stores that has followed in the pandemic’s wake, two shifts have been apparent.

The obvious one is the slowing of sales. The US Census Bureau reported that year over year sales for March 2020 showed a 6.2% drop. The UK meanwhile experienced a drop of over 20% in total retail sales this April, and in the clothing industry, many brands and retailers have seen their sales cut in half! While revenues have grown with businesses re-opening recently, most analysts conclude that brick and mortar stores are in serious trouble.

But underneath these dire numbers is another trend that bodes well for agile players in the marketplace: brands with established and streamlined eCommerce platforms have seen the traditional sales lost to the virus replaced online. American retailer Target, for one, posted jaw-dropping growth this April, with digital sales increasing by 275%, a success which allowed the company to boast 7% growth this Spring, making it their most successful quarter since the year 2000. Target’s investment in their eCommerce capabilities, particularly same-day shipping and curbside pickup, have allowed them to attract masses of customers during the pandemic.

It’s possible that the changes we are experiencing will prove to be a temporary blip, and traditional retail models will soon ascend to their usual perch atop the marketplace, but we’ll happily take your money if you’re making that wager. We feel that caution about crowded shops will be compounded by a surge of affection for the ease offered by the new way of doing business. A recent survey from PYMNTS found that “more than half of the consumers (52 percent) who shifted to digital grocery shopping say they won’t go back to their old ways of shopping, as online delivery and curbside pickup are gaining ground. And 60 per cent of the consumers who shifted to digital to shop for things other than grocery items say the same .”

While the virus might be motivating this shift in the short-term, it is likely to persist because the new eCommerce options are infinitely more convenient than the old way of doing business. Curbside pickup and home delivery will free up a significant swath of time for most families at the supermarket alone. Online clothing, beauty, and electronics retailers have been streamlining their sales models for years, removing the barriers of difficult returns processes, slow deliveries, and complicated check-outs. As the COVID-19 crisis pushes consumers to experiment with eCommerce, many are finding the online world irresistibly convenient, economical, and home to a larger array of products and choices.  

Digital marketing is also going to become more important than ever. While advertising budgets have suffered deep cuts all around the world, messaging via social media, and the time consumers spend online have increased exponentially in regions hit by the virus, with reports showing increases of 50% in social traffic. Because digital advertising offers reams of data on the preferences and purchasing habits of consumers, as well as the ability to instantly gauge whether a marketing campaign is proving effective, we would expect a significant shift towards online ad spend. Now is not the time to waste millions on vague ideas of “awareness”, it’s the time to harness data and deliver your message with surgical precision.

While we’ve already marvelled at Ocado’s innovative use of robotics and AI to create warehouses and grocery stores perfectly suited to our present moment, Amazon has developed a new technology that has the potential to revolutionize the way we shop. The Amazon Dash Cart is a small shopping cart equipped with sensors, scanners, and a touch screen which allows users to get help from Alexa, access shopping lists or scan coupons. When items are placed in the cart they’re scanned automatically, and when the customer is done shopping they simply walk out of the store, with their account debited and a receipt instantly arriving via email. The cart and Amazon’s “Just Walk Out” technology, which is making its way into restaurants and retail outlets, enable both convenient customer experiences and social distancing. As both shoppers and workers seek to avoid infectious droplets, reducing human to human contact in supply chains and in-store experiences seems like a winning idea.

While we are sure the future will amaze and confound us, at Adimo we’re convinced that the current crisis has dealt a near-fatal blow to traditional retail models. If you feel that you need a partner to help guide you into the future of commerce, don’t hesitate to get in touch today!

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