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The pandemic has transformed the way the world shops. Ecommerce sales rose sharply when the pandemic set in and have continued to rise even as stores have reopened. With the holiday shopping season upon us, online sales are projected to jump yet again. Although Amazon continues to dominate ecommerce, smaller online retailers are seeing increases in sales. In fact, a Shopify report of the top trending items selling online shows that consumers are now searching for products to improve their homes and at-home lifestyles. Additionally, as consumers spend more online, they expect better customer service and streamlined digital solutions.
2020 Growth In Ecommerce Sales Impacts Businesses Big And Small
In 2020, Q2 ecommerce sales in the U.S. rose more than 30% from Q1 2020 and more than 44% from Q2 2019, according to the U.S. Department of Commerce. A global survey by Salesforce reports that consumers now interact online with companies 60% of the time and offline 40% of the time, nearly the inverse of 2019 when only 42% of consumer interactions with companies were online. The Salesforce survey, which included responses from 12,000 consumers in 27 countries, also shows that the majority of shoppers (58%) spending online for safety reasons will continue to purchase online once the pandemic abates.
Ecommerce retailers across the industry have seen growth in sales, which is projected to continue through the end of 2020 and beyond. Amazon, the leader in U.S. ecommerce, reported net sales up 37% during Q3 2020, and Amazon’s Prime Day in October was the best on record since the annual event started in 2015. An Amazon press release celebrated nearly 60% year-over-year (YOY) growth in sales on Prime Day by the small- and medium-sized businesses that sell on the platform. Smaller ecommerce retailers outside of the Amazon marketplace are also benefiting from the growth in online shopping. Adobe predicts small retailers that bring in $10 million to $50 million in online sales annually will report a collective 107% revenue boost during the holidays. Overall, online holiday sales are forecasted to jump 33% from 2019 to a record $189 billion in 2020, according to Adobe Analytics. The upcoming holiday season is also an opportunity for online retailers to reach an even greater market, as Adobe estimates 9% of all holiday shoppers will be making their first online purchases this year.
Best-Selling Ecommerce Products Are Focused On In-Home Enjoyment
At-Home Lifestyle Products Are Hot In Ecommerce
In 2020, products that enhance the at-home lifestyle are hot sellers across ecommerce. Shopify found that beauty products such as peel-off face masks and nail polish are among the top selling products online, as people seek to recreate the spa experience at home. Ulta Beauty, a U.S. cosmetics and skin care brand with more than 1,200 stores in the U.S., saw a 200% rise in their online sales during Q2 2020, even as their overall sales dipped. Ulta’s omnichannel fulfillment options, including curbside pickup and buy online pick up in store (BOPIS), supported 20% of Ulta’s ecommerce sales. “New member acquisitions through our digital channels continue to expand at healthy rates, and we continue to see previously in-store only members engage with us online with greater frequency,” said Mary Dillon, Ulta CEO.
At-Home Workout Equipment Ecommerce Sales Continue To Climb
Throughout the pandemic, as at-home workouts became more popular, home fitness products saw an uptick in sales, and they remain top trending items online as some people continue to steer clear of the gym. ICON Fitness, the company that owns Nordictrack, Proform and iFit, announced revenue exceeding $1 billion from September 2019 to September 2020. Less expensive fitness products, including exercise bands, yoga/pilates mats and water bottles, are also hot sellers online according to a Shopify report.
Furniture & Decor Is A Growing Ecommerce Category
As families continue to work, learn and relax at home, many consumers are searching for home furniture and decor online to enhance their home environments. This home-focused trend has benefitted furniture company Wayfair, which turned a profit in Q2 2020 for the first time in years, posting nearly $274 million in net income with online sales surging 83.7% YOY to reach $4.3 billion. When the pandemic set in, Wayfair focused their efforts on improving the efficiency of their fulfillment processes to handle the surge in online orders, and this improvement in service paid off. “Our proprietary logistics network allowed us to effectively meet peak demand, not just for a few days or a three-week holiday stretch, but consistently over the course of a full quarter,” said Niraj Shah, CEO of Wayfair.
As Consumers Spend More Online, They Expect More From Ecommerce Retailers
According to a Salesforce global survey, consumers expect more than in the past from the ecommerce brands and retailers they are buying from. Of those surveyed, 68% said COVID-19 elevated their expectations of companies’ digital capabilities, 88% expect companies of all kinds to accelerate digital initiatives to improve customer experiences and 83% expect retailers to provide flexible shipping and in-store fulfillment options. Consumers also want more of an “in-store experience” online, which some brands and retailers are providing via personalized virtual appointments and social media live streaming. Lululemon is one company providing many of these services with “digital educators” who video chat with consumers to help identify the products that best fit their needs and a livestream channel on YouTube. Lululemon reported their Q2 2020 online sales were up 157% YOY.
Ecommerce sales continue to see rapid growth, even as some brick-and-mortar stores have reopened as the holiday season kicks off. It seems evident that shoppers who turned to ecommerce for safety and convenience at the outset of the pandemic will continue to do the majority of their shopping online, including during the holidays. Brands and retailers from all sectors can benefit from ecommerce growth this holiday season. High-touch experiences with a variety of fulfillment options will help.
Download 2020 Holiday Season: Consumer Mindsets & The Growth Of Ecommerce, a new ebook from DMS. A compilation of previously published articles, this ebook was published to help digital advertisers optimize their campaigns to align with evolving consumer expectations, behaviors and demands.
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