Online shopping was already increasing at a steady rate going into the early parts of 2020. The unexpected global pandemic added gas to the fire as e-commerce orders surged like never before.
E-commerce sales in the United States totaled $861 billion in 2020. This is a 44% year-over-year increase. When you consider that Q1 of 2020 saw just a 2.4% increase, it puts into perspective how much the e-commerce market accelerated during the year. Online sales accounted for 21.3% of all retail spending in 2020—a considerable increase from 15.8% in 2019 and 14.3% in 2018. Reports estimate that the shift caused by the pandemic has accelerated the transition from physical to digital by five years.
This shift hasn’t just driven more people to shop online but is changing how people shop online. In this post, we’ll examine how online shopping behavior changed in 2020 and which of these changes are likely to last.
The unanticipated increase in online orders placed a strain on shipping carriers around the country. Many consumers saw delivery times for non-essential goods rise to weeks or even months. The need for faster fulfillment and the desire to create a safe shopping experience led to a significant increase in fulfillment methods like buy online pick up in-store (BOPIS). Omnichannel companies were able to use their physical locations to have customers come to pick up their items.
Research from Mckinsey shows that BOPIS grew 28% year over year in February 2020. The popularity of these fulfillment methods is here to stay as 56% of consumers have a high intention of using them going forward.
Customers who adjusted their shopping behavior due to the pandemic were also more likely to try new brands. Research from Mckinsey shows that 40% of consumers said they changed brands in 2020. This is double the amount from 2019. Millennials and Gen Z consumers were more likely to try new brands than other generations. Those willing to try new offerings were motivated by both convenience and a desire to buy from a brand that matches their values.
Online retailers were able to regain some ground on Amazon as the e-commerce giant saw its share of the market decrease in 2020. The company represented 31% of all U.S. e-commerce sales in 2020, a sizable drop from 43.8% in 2019.
Forced lifestyle changes and the inability to safely shop in physical stores led to massive online growth for certain categories of products. The most notable of these were food and groceries, home and garden, and sports and outdoor products.
Home and garden experienced the most online growth with 1.84 billion website visits in the month of June. This was a 61% increase from January. E-commerce stores selling food and grocery products saw a 38% increase in online traffic over the same time period, with over one billion visits in the month of June. Visits for the sports and outdoors category increased by 100 million between January and June.
These trends are likely to continue going forward. Mckinsey research shows that 67% of consumers who used grocery delivery plan to keep ordering online.
Brands and retailers that want to make the most of the digital shift need a flexible e-commerce solution. fabric understands this and has designed its suite of e-commerce services to give businesses from all industries the ability to customize their shopping experience at scale and without limitations.