E-commerce Statistics You Should Know in 2021
The e-commerce sector had been steadily growing in the years before the pandemic, and COVID-19 accelerated its growth. In the first quarter of 2020, it underwent 10 years’ growth in the space of three months. According to McKinsey, 75% of U.S. consumers tried a new brand, store, or website during the pandemic, and 60% plan to continue their customer relationship with these newly discovered businesses.
As for growth, these e-commerce statistics provide clues about what the future might hold:
It’s estimated that 95% of purchases will be made through e-commerce by 2040
The industry is growing 23% year-over-year
93.5% of internet users make purchases online
74% of consumers depend on social networks to make purchasing decisions
Online stores with a social media presence have an average of 32% more sales than those without
40% of online holiday-season purchases occur on smartphones
In this post, we’ll be exploring how the pandemic has changed e-commerce, and what you should do to stay competitive in this transforming environment.
The pandemic has changed online shopping. E-commerce websites are reporting more website traffic, and online orders for grocery deliveries have increased. Meanwhile, people aged 65 and over have gotten more comfortable with online shopping, and many retailers are now adjusting their strategies to accommodate this new customer base.
Here are some key facts you should know:
COVID forced millions of people to stay home to try and stop the virus from spreading, and consumers turned to the internet for finding everyday items like groceries and toilet paper.
Retail websites had around 22 billion visits in June 2020 last year, up from 16.7 million in January of the same year. This increase in traffic surpassed the normal holiday season peaks.
Online delivery orders surged in the US, with orders of pasta rising by around 699% in the first quarter of 2020 when compared to the previous year. Online demand for evaporated and tomato sauce went up by 287% and 269%, respectively.
The retail giant is now overtaking search engines for product research, with 63% of consumers in e-commerce marketplaces starting their online searches with Amazon. This goes to show Amazon’s continuing dominance in the digital commerce space throughout the customer journey.
The number of Amazon Prime users in the U.S. is expected to reach 153.1 million by 2022. Businesses that sell products online should strongly consider offering their products through Amazon.
People who are 65 or older are now the fastest-growing segment of online shoppers. On average, customers aged 65 and over spent a total of $1,615 online between January and October 2020. This represents a 49% increase from the previous year. Their purchase frequency also increased by more than 40%.
Shoppers aged 60 and over who ordered groceries from Instacart did so 25% more frequently than younger people and spent 35% more on household items. Thrive Market, which saw a surge in spending from customers in the 65+ demographic, changed its online shopping interface to better accommodate those customers.
Online grocery shopping skyrocketed during COVID. Now, it’s expected to become more popular than previously estimated.
Before COVID, online grocery sales were growing and becoming an important part of the retail industry’s future. But online grocery purchases made up a tiny piece of the overall market share. U.S. e-commerce food sales were expected to total around $24 billion in 2020 and rise to over $38 billion in 2023, giving the industry a compound annual growth rate (CAGR) of 17.3%.
Now it’s estimated that, as the pandemic runs its course over the next few months, online grocery adoption will reach 55% of consumers in the U.S. by the end of 2024. This is greater than what it would have reached without COVID.
Buy online and pick-up in-store (BOPIS) also gained popularity during the pandemic, with many grocery stores rolling out a curbside pickup option. This new way of shopping is here to stay, with 56% of consumers saying they intend to keep using BOPIS, and 45% of consumers say they’ll still use grocery delivery after the pandemic.
Ensure your business’s website can handle increased website traffic and can serve older customer bases. If you have a brick-and-mortar store and don’t currently offer online shopping options, now would be a good time to look into developing your e-commerce site.
Remember that simply having an e-commerce site isn’t enough — it needs to provide a great user experience and offer customers access to any support they might need.
Several sectors did incredibly well in 2020. And it’s expected they’ll keep doing well after the pandemic, with consumers realizing they can get the products they're accustomed to just as easily — if not easier — online.
The following sectors saw significant growth during the pandemic, according to e-commerce growth statistics:
Year-over-year spending on online health and wellness products increased by $19.22 billion in 2020 and is expected to grow by another $39.56 billion over the next five years.
These kinds of products are part of many peoples’ daily routines, which can lead to higher repeat purchases. These products also include items essential for maintaining health, such as soap — the leading health care product in the U.S., with sales of over $5 billion in 2020.
Expect this sector to become increasingly competitive, with brands attempting to find new long-term customers through promotional offers, free shipping, and targeted advertising.
During the pandemic, approximately 1.2 billion children were out of school, due to the pandemic. Schools quickly pivoted to e-learning — technology that has existed for a while, but became widely adopted last year, both for educational and corporate training.
The e-learning sector is expected to grow 8% by 2026. Beyond traditional K-12 e-learning growth, e-learning platforms like Verbling and Lessonface show promise for growth. Verbling is one of many language-learning platforms, and Lessonface — a platform that offers online music lessons — has expanded to include renowned musicians from countries around the world.
According to analysis by Finaria, the fashion industry represents the biggest chunk of the e-commerce market. It’s expected to generate $759.5 billion in revenue in 2021, which represents a 15% increase year-over-year. Over the next four years, online sales of apparel and accessories are expected to amount to $1 trillion. Growth of the clothing and apparel market is projected to be largest in China, with a CAGR of 14.1% from 2017 to 2022.
The online footwear market is expected to grow to $530.3 billion by 2027, up from $365.5 billion in 2020, with Asian companies dominating this market..
The global online banking market size is predicted to reach $20.5 billion by 2026 — a CAGR of 12.3% from 2020 to 2026. Additionally, the World Retail Banking Report says that 57% of consumers now prefer internet banking, compared to 49% before the pandemic. So COVID is continuing to move customers towards digital banking.
From January to March 2020, retail websites gained more than 1.5 billion new visitors. With many brick-and-mortar stores closed during the pandemic, many everyday necessities had to be purchased online. Online marketplaces such as Amazon, eBay, and Walmart are experiencing a surge in traffic and sales, too.
Take a look at why these businesses are doing well in e-commerce. It’s because of features like helpful tutorials, easy-to-use apps, fast customer service, and comprehensive search functions.
In the early days of the pandemic, customers might have been more willing to accept that some e-commerce shopping experiences were less than optimal, but today, customers expect more.
Although there’s no face-to-face interaction with a customer service agent online, consumers still expect good service. Many consumers will walk away from a brand that doesn't have personalized, fast, and transparent customer service.
You should know that:
Over half of customers know when a brand is using personalization tailored to them, and two-thirds say they expect personalization.
Personalization is how brands can go further than advertising and work to make a connection with each of their customers. Previously, segmenting audiences based on behavior had been a practice that applied only to email. But now, technology allows you to personalize everything from remarketing ads to the content that’s displayed on your website for returning visitors.
It’s becoming increasingly beneficial to support customers with intelligent self-service and automated customer contact systems. Consumers want businesses to make it as easy as possible for them to solve their customer service issues themselves, as illustrated by these e-commerce statistics:
70% of customers expect a company website to include a self-service option
33% of global customers say chatbot interactions are "very effective" in dealing with customer service issues
Half of customers say they can’t solve an issue on their own because there’s too little information online
Only 12% of U.S. consumers rated self-service portals as "not at all effective" in resolving their issue
For retailers to stay competitive, the shipping and returns process needs to be more efficient and seamless. Delivery times need to be faster, and payment data needs to be protected. Speed and transparency are just as important as interface and inventory, and this requires well-organized infrastructure and tracking to create.
Retailers should pay closer attention to the customer’s experience and implement technologies that help show users how they can track their orders, because 67% of consumers want to know where their order is, from the moment they make their purchase until they receive it.
A HubSpot survey revealed that 90% of customers think an immediate response is important or very important when they have a customer support question; 82% say it's important when they have a marketing or sales question, and 60% define "immediate" as 10 minutes or less, when they have a support question.
Given that 90% of customers say customer service is important when deciding if they should stay loyal to a company, and 58% will end the relationship if customer service does not meet their expectations, it’s important for businesses to improve response times.
Customers expect their online checkout experiences to be easy and fast. They don’t want too many complicated steps to get in the way, and they’re also concerned about security. One report revealed that of the 7,000 consumers surveyed in North America and Europe, 92% wanted a fast, frictionless, trustworthy experience during checkout.
In the same report, 65% of consumers said they’ve abandoned opening an account or completing a transaction on at least one occasion because of friction. That includes the process taking too long to complete. And a Baymard Research Study found the global average cart abandonment rate is 69.2%.
With faster, more personalized, and more transparent customer service expected online, you should be preparing your website to handle these kinds of demands from customers. This includes implementing features such as a knowledge base, product details, and a simplified checkout process.
Keep in mind that you can use automation to improve your customer service. While your customer service agents may occasionally need to speak with customers via live chat, you can use chatbots to answer common questions. Chatbots with AI become better over time at understanding the nuances of communication, and they can make decisions about whether to transfer a chat to a live agent.
More and more consumers are becoming comfortable with making purchases online. And they expect the buying process to be fast, safe, and hassle-free. Despite the decrease in human interaction e-commerce brings, people still expect high-quality customer service. This could make or break how successful your business is online, during the pandemic and beyond.
E-commerce is an increasingly competitive field. To stay ahead of your competitors, you’ll need to ensure your business offers superb customer service online. And your payment process must be effortless and secure.
When consumers have so many options available for online shopping, they won’t settle for experiences that are less than ideal. They don’t want to waste time looking for information or waiting for answers.
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