U.S. E-commerce sales as a percentage of total Retail sales have experienced a hockey stick growth in 2020. This comes as the U.S. government urged everyone to stay at home due to the pandemic outbreak, moving most of the consumption online.
The ecommerce sales growth trend has been upwards since 2009, growing by ~1.5% each year, reaching 16% in 2019. However, the change since the start of 2020, in just 8 weeks has been +11% absolute ecommerce growth, bringing the U.S. e-commerce sales penetration up to a whopping 27% compared to total retail sales! (Bank of America U.S. Department of Commerce, ShawSpring Research, 2020).
Such significant ecommerce sales growth is expected to have a lasting impact even after the end of the pandemic as it is a shift in consumer habits and thus behavior. As the lockdown in many states has lasted for an extended period, spanning over several weeks and continuing, that according to several behavioral scientists, is enough time for consumers to form new shopping habits. Even if one traditionally has been shopping in physical retail stores, a new habit is being formed of ecommerce shopping. Once the initial hurdle of overcoming the digital barrier has passed, accounts set up, online payment connected. Then, what’s left in many repeat purchase cases is simply to click a button and repeat purchase or order anew. Thus, the initial barrier to entry is passed and what’s left to enjoy is the convenience of shopping without waiting in ques, carrying bags, and 24/7 opening hours.
What this means for your business
If your business is in the U.S., that means that now more of the business takes place online and ecommerce sales are booming. It is now more than ever it is important to capture the attention and eyes of the target audience of your business. The excellent news is that due to the advancements in technology, especially, AI, digital advertising is now more precise, cost-efficient, and effective than before. The key digital channels that offer online advertising, like Google(incl. Youtube and 90% of the Internet through GDN), Facebook/Instagram and Amazon, have had massive amounts of data going through their machine learning algorithms that have allowed their algorithms to become more sophisticated in predicting users interests, behavior, and likely purchases.
Plus, every campaign and interaction is fully traceable, making it easier to understand what works and what doesn’t. Once data has been collected, remarketing allows you to spend the advertising dollar on those who have shown interest and action.
As consumption habits change and more and more consumers move online, businesses have the opportunity to engage with their target audiences online in a measurable and cost-effective way.
If you are interested in increasing the ecommerce performance of your website, get in touch with us now!