Can Online Retailers Maintain Their Pre-COVID-19 Momentum?

Can Online Retailers Maintain Their Pre-COVID-19 Momentum?

Summary:

After booming e-commerce sales in 2020, will retailers be able to maintain their growth in 2021?

For the past decade, e-commerce sales have been on a steady upward trajectory, with double-digit gains year over year. Even prior to the pandemic, e-commerce sales accounted for the incredible growth seen by the retail industry. Nearly 56% of all sales growth was attributed to the boom in online sales, with recent projections estimating that e-commerce sales could top $6.5 trillion a year by 2023

And the brands that are experiencing the highest rates of growth, especially in 2020, are those that are direct-to-consumers and offer a wide range of “essential” items, such as office supplies and health and beauty products. As the pandemic stretched on and consumers were forced to remain at home due to stay at home orders, e-commerce sales in the health and beauty industry experienced a significant 53% increase through Q3 of 2020.

Though e-commerce sales have seen an impressive uptick in 2020, the question still remains: Can retailers maintain pre-COVID sales numbers?

The short answer is: yes… but, with a slight caveat.

The crisis-oriented consumer has come to expect a certain level of convenience in terms of shopping online and delivery options. And, with widespread lockdowns reshaping how and when consumers could shop in brick and mortar retail locations, this drove record numbers of shoppers to buy online, more than ever before. In a recent McKinsey research study, 75% of consumers tried a new shopping habit, with 20% of people shopping online for the first time. What’s more notable is that 80% or more of consumers intend to continue their new online shopping behavior even after the pandemic. 

What’s even more notable is the factor that largely shaped consumer behavior: product availability. Researchers have found that price was no longer the most important influencing factor in whether a consumer completed an online purchase or not. Surveys estimate that approximately 48% of consumers selected product inventory as the most important factor and would lead them to switch brands when buying online. This was followed closely by convenience (34%), and then value (30%), as being the top three purchasing decision factors. As the largest predictor of whether a consumer shopped with an online retailer, this represents a significant shift in consumer behavior that will likely spur continued growth in the e-commerce sector. 

What does this mean for online retailers?

The incredible opportunity to continue to get (and stay) in front of millions of online shoppers who are ready to buy and more trusting now of making online purchases than before. However, those online retailers that can offer a wide range of essential products and promise fast shipping or provide curbside pickup are well-positioned to cash in on the e-commerce growth that is here to stay.

If the global pandemic has increased anything in the world, it has been Internet searches. According to Google, between 30k-50k searches a day have never been searched before. That’s a record number of consumers searching for new products, services, and options than in any time in history. This represents an incredible opportunity for online retailers to get their products and services in front of a whole new audience by examining what they’re searching for. 

As consumers have been forced to quickly adapt to this new pandemic, work-from-home world, searches related to managing anxiety, stress, and depression are at an all-time high. And, consumer demand is shifting away from in-person services to anything that can be delivered safely online or in a virtual environment. Therefore, by incorporating keywords like “stress”, “relief”, “mindset” and other wellness-related topics, online retailers can strategically stay top of mind and top of search for the 350k new weekly Google searches. 

Recreational hobby searches have also experienced a record jump of over 400% with phrases such as “what to do at home” or “at-home hobbies” leading searches since March 2020. 

In addition, products and services that are labeled as at-home or virtual options have consistently outranked other in-person alternatives in search engine result queries. For online retailers looking to take advantage of the boom in online searches, updating search engine ads to include online, virtual, and at-home within the ad copy could increase ad impressions and clicks.

But, what will separate the retailers that can take advantage of this increase in new online searches from those who miss out will come down to audience marketing. Understanding what people are searching for and how their search behavior has changed through the pandemic are important consumer insights to consider when retargeting audiences. What may have worked in 2019 to drive traffic to e-commerce sites will need to evolve to capture the attention of the emerging crisis-oriented consumer. For retailers that do the consumer research now and can incorporate the most used keyword searches into their ad and marketing messages will be handsomely rewarded with a (new) and bigger piece of the online pie.

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