Is E-Commerce Growth Here to Stay? The Experts Weigh In

• • • • • •

Consumer spending habits have been drastically altered throughout 2020. From data about personal savings to online shopping experiences to the strength of the market and beyond, here’s what brands need to know about consumer behavior right now, as the fourth quarter comes to a close.

If 2020 will be remembered for one thing in the commerce sector, it’s that it pushed American consumers toward online shopping at a rather incredible rate.

Between 2009 and 2019, the percentage of all sales credited to e-commerce rose from 5.6% to 16%. In total, that’s a tick over 10%, but during just the first eight weeks of lockdowns, the percentage leaped an eye-popping 11%.

It was a bump that left e-commerce accountable for 27% of all retail sales. 

“There are some that believe this is an artificial boost,” said Suzy founder and CEO Matt Britton, during a recent Suzy webinar, State of the Consumer: Unwrapping Spending Habits of Holiday Shoppers. “I’m on the side that we’re here for good.”

Britton’s belief stems from the fact that online shopping was already trending in this direction, year after year, dating back more than a decade. Out of necessity, this year simply sped it up. With consumers having grown more comfortable with e-shopping technology, and in many cases having positive experiences along the way, there’s little reason to think a return to normal will dissolve such progress.

“All everyone needs to do is look at what happened with China and SARS just a few years ago,” said Britton’s co-host, Rachel Tipograph, founder and CEO of MikMak, an e-commerce platform that lets brands unify their digital storefront across online retailers. “That is when the digital economy accelerated and stayed.”

Tipograph concedes that post-pandemic, American e-commerce sales could fall slightly. 

In a Suzy survey conducted in September, 41% of responding consumers said they will miss shopping at brick-and-mortar retailers this holiday season. In a later Suzy survey, cited in USA Today, in spite of the pandemic conditions, 36% of consumers said they planned to conduct in-store shopping on Black Friday. 

Combining all that data with the new popularity of the buy-online-pickup-in-store option, it’s clear people still desire some person-to-person connectivity in their shopping experience.

But any dip in e-commerce would likely be marginal, Tipograph said, and could later be wiped out with just a couple more years of growth anyway.

“If you’re working at a brand right now, and you’re not understanding that e-commerce is about to become a significant portion of your revenue forever, then you’re going to fall further and further behind,” Tipograph said. “I’m willing to put my whole career against it.”

This is useful as both long- and short-term advice. During the 2020 holidays, e-commerce will almost certainly be a driving force behind the all-important fourth-quarter sales burst. And if a brand is well-positioned in the digital space, they’re primed to benefit from the fact that, as Britton said, “consumers have money in their pockets.”

Given the pandemic-compelled layoffs, this is unfortunately not true for every consumer; however, those who’ve remained gainfully employed throughout the crisis have seen their personal savings balloon to never-before-seen rates. They spiked last spring at nearly 35%, and, now at 13.6%, remain higher than they were at any point in the last 45 years.

This savings boon was possible because people were not engaging in a host of social activities, like travel, out of safety concerns this year. They could be eager to spend a chunk of those savings in the next couple of weeks.

“I also think they’re at a time, during this holiday season, where they’re feeling depressed,” Britton observed of consumers. “They don’t have the ability to see their families, and sometimes a little shopping therapy helps.”

For some companies, optimizing e-commerce capabilities may take restructuring. Tipograph said that e-commerce oversight typically sits with sales teams or as a center of excellence, which might not represent the best approaches. 

“Historically, it’s been completely disconnected from the brand,” Tipograph added. This is something that must be amended, though, if a brand wishes to compete, in this quarter or any other moving forward. 

As Tipograph told Britton about retail today: “What happens in e-commerce is your brand.”

For more insights into the state of the consumer, right now, as the holiday shopping season continues, watch the entire webinar at Suzy.com.