Posted by: Business Insider
Posted on: 2/24/2021
Total ecommerce sales in 2020 jumped 32.4% year over year (YoY), reaching a whopping $791.7 billion, according to the latest data from the US Census Bureau. Ecommerce sales accounted for 14% of total retail sales last year—marking an increase from the 11% it made up in 2019.
The coronavirus pandemic was a key growth factor, as more consumers turned to online channels to complete their purchases in order to avoid in-store environments, especially amid early lockdown measures as well as during the peak holiday shopping season.
And Insider Intelligence thinks retailers like Amazon and Walmart cashed in big during the 2020 ecommerce boom, and likely plan to leverage this surge as a growth tool into 2021. Despite some hiccups along the way, Amazon was a clear winner in 2020: The etail giant ended the year with $66.45 billion in online store sales for Q4.
Consumers may have flocked to Amazon because of its vast online presence in various sectors, including online grocery, as well as its fast delivery capabilities. Going forward, the etailer is likely banking on the ecommerce surge to continue into 2021, with the firm recently ramping up its air cargo capabilities to enhance delivery services for its customers.
Meanwhile, Walmart was also a clear ecommerce winner throughout 2020: The firm wrapped up its final quarter of 2020 with 79% YoY growth in online sales—likely boosted by its in-store network, which it has been using to boost fulfillment efforts. More recently, Walmart said it plans to invest heavily in building up an automated ecommerce fulfillment network—perhaps indicative of its belief that online shopping will continue to swell.
Ecommerce doesn't seem to be going away anytime soon—and online shopping will likely have lasting impacts on the overall retail sector, helping boost digital payments along the way.
- Retailers will likely ramp up their digital offerings as consumer shopping habits continue to lean in favor of ecommerce. An estimated 40% of consumers say they plan to shop in-store either the same amount or less after being vaccinated, according to data from Wednesday by First Insight as cited by CNBC. This spells bad news for brick-and-mortar retailers, considering that most consumers have curbed in-store shopping during the pandemic. And it might cause even more businesses to maintain or ramp up their online presence as ecommerce continues to build momentum.
- Digital payment providers could grow even further as more businesses lean on them to power ecommerce transactions. Providers like Stripe as well as Shopify, which helps power ecommerce payments, could continue to see business rise as merchants look to digitize down the line: 40% of businesses plan to increase their digital investments in 2021, per a survey by Intuit. And because digital payments play a key role in ecommerce, digitally native payment providers could see further opportunities in the future.
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