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Navigating Through a Shifting Environment: Real-Time Data on eCommerce Sales & Online Shopper Behavior

Earlier this week, NetElixir held the latest installment of our Impact of COVID-19 on Ecommerce Sales and Online Shopping Behavior webinar series with our partners at BWG Connect. As always, our data set looked at the daily data from 2020 and 2019 for seven retail categories: Apparel, Food and Grocery, Gifting, Home Furnishing, Home Decor, Pet Supplies, and Tools and Hardware. We broke down the data into twelve two-week periods, starting from March 22 and ending on July 25.

As a fanatically analytical digital marketing company, NetElixir aims to “share, almost relentlessly, updated insights,” explains our Founder and CEO, Udayan Bose.

Updated insights are crucial, especially during the coronavirus pandemic, as sales and behavior are constantly in flux. Satya Nadella, CEO of Microsoft, said, “We’ve seen two years’ worth of digital transformation in two months.” We have had to continually adapt, experiment, and innovate to navigate these uncertain and unpredictable times. 

Changing Customer Behavior

Consumer preferences are changing almost weekly as they adapt to the new normal. Why consumers buy is just as important as how and when. The Elements of Value Pyramid, by Bain and Co., categorizes consumer values based on emotional and psychological needs. Living through a pandemic upsets many of the average reasons why people would buy different products in the pre-pandemc times. 

We see consumers buying based on functionality, choosing products to simplify their lives to reduce their anxieties. Emotionally, consumers tend to buy more products that promote stress-reduction, wellness, and nostalgia. This nostalgia brings consumers back to past vacations, their childhood, memories from friends and family before dynamics were upset and future plans uncertain. Finally, consumers are buying more things that provide hope. Pivoting a marketing strategy on helpfulness and hopefulness could be a valuable strategy, especially as we veer closer to the holiday season. 

As marketers, we have to consider that the changes we are seeing in consumer behavior may become permanent. It takes, on average, 66 days to form a habit. That’s anything from mid-May on. Learning about your customers now will help you engage them better in the upcoming future.

Impact of the Coronavirus on Ecommerce Sales

Ecommerce sales during coronavirus pandemic
A breakdown of the year over year changes in ecommerce sales across seven retail categories

Since the first two weeks of June, the Home Furnishings retail category has seen the greatest year over year growth, surpassing the Food and Grocery retail category. Home Furnishings has seen consistent triple digit year over year growth since the end of April. 

The Apparel retail category has seen positive year over year growth since the release of the stimulus check in mid-April. As ecommerce sales for Apparel continues to grow however, we do see a decline in the sales of other categories. During the first two weeks of July, Apparel has seen its biggest year over year increase, compared to the same time period in 2019, of just over 25%. The Apparel, Food and Grocery, and Home Furnishings categories all saw growth throughout the month of July to date. 

The Gifting retail category was what Bose called “one of most interesting [categories] in our dataset.” “Consumers showed an outpouring of compassion,” Bose continued, noting that consumers were in “active gifting modes since March for about two to three months.” Gifting can make a resurgence as we draw closer to the holiday season, so marketers may want to consider new gifting opportunities and products. 

Pet Supplies has remained steady in terms of ecommerce sales, as has the Tools and Hardware retail category. Our hobbies and our pets continue to occupy our time.

June sales were slower, on average, compared to May, but many picked back up in July. However, we still note many fluctuations so it is hard to conclude how summer sales will progress.

Ecommerce, though, will play a crucial role, as online sales are still booming across categories. According to the government census Monthly Retail Trade Report, ecommerce sales are continually and monumentally increasing month to month. Year over year, the census noted a 10% increase in ecommerce sales for the month of January; the month of June saw nearly a 40% year over year increase.

There is a huge opportunity for online retailers to participate in this ecommerce explosion. With great opportunity, however, comes extra considerations. Retailers may struggle to ship products on time and keep their inventory stocked. There is an increasing pressure on business models to meet shipping demands. Having an early expectation of these struggles will help business leaders pivot accordingly. 

Ecommerce Metrics

According to our dataset, website conversion rates have not been as strong in June and July as they were in April and May. Conversion rates for the Food and Grocery retail category peaked in April, though are still higher year over year from 2019. Across categories, conversion rates have decreased since May, as competitors are becoming more aggressive and thus increase the choices presented to consumers. The Apparel retail category alone experienced a slightly higher conversion rate in July 2020 compared to June 2020. The initial surge and panic related to shipping times and inventory urged consumers to shop more quickly and impulsively. As the situation has calmed, shoppers are browsing and researching more.

website conversion rates for retail ecommerce
The monthly conversion rate across seven retail categories for month over month and year over year comparisons.

Amazon is driving CPCs on Google. Since June 10, we have noticed Amazon aggressively advertising on Google. As Amazon is a big market mover, more business are also advertising for the same keywords as Amazon. CPCs for the Apparel, Gifting, and Home Furnishing retail categories have increased more.

eMarketer projects an estimated 7.4 million new digital buyers in 2020, as the coronavirus pandemic continually accelerates the digital trend and convenience of ecommerce. Majority of these buyers are in the 55+ age group, opening a new demographic potential this holiday season. 

New online shoppers have contributed a larger percentage of total ecommerce sales across our dataset, from 37% in 2019 to 41% in 2020. Online shoppers who started online shopping during the coronavirus pandemic have more purchase instances than pre-pandemic new shoppers. Once these new shoppers got over the initial hump of getting and shopping online, once that barrier had been crossed, they became more lively and active online shoppers. 

It is important to track the percentage of new online orders to total orders and the behavior of these new shoppers. Consider a new customer satisfaction survey to gauge the likelihood of their loyalty and how to pivot a holiday marketing strategy to encourage their continued business. Analyze customer’s paths to purchase to ensure a seamless online shopping experience and reduce friction points.

Further Observations and Predictions Regarding Ecommerce Sales

Ecommerce sales will continue to grow at over 30% year over year throughout the rest of 2020. Mobile will drive a larger and larger percentage of these sales; mobile sales have already increased 48-59% across categories. Throughout the pandemic, we saw retailers experiment with developing and testing mobile only offers to drive sales. Mobile sales are often impulsive and consumers may respond better to time-limited discounts on mobile. 

The dayparts of when people search, shop, and buy have changed for every retail category. When people have searched and shopped in January and February is different than currently, so we expect continued fluctuations for when they will shop during the Cyber 5 hours – especially as more retailers announced that their stores will be closed on Thanksgiving Day

There is so much uncertainty surrounding this holiday season, including how much incremental ecommerce revenue will be added. We estimate a range from $50 to $80 billion in incremental ecommerce revenue will be available, making the holidays a financially critical time. 

2020 Holiday Season

“There is no precedence, no historical background,” Bose said, regarding 2020’s upcoming holiday season. 

Holiday shopping could start earlier this year, possibly around October 5 to 6. The delayed Amazon Prime Day will influence the holiday season start, as the Amazon market drives trends. During the coronavirus pandemic, there have been numerous shipping delays, including by Amazon itself: Prime orders, which usually took ½ days, were now taking an average of 8.2 days to arrive. Therefore, customers will compensate for the spring and summer delays by shopping earlier in anticipation of the holidays. 

This holiday season, it will be important to connect the dots across a wide range of different scenarios and outcomes this year may bring. Retailers and marketers should have various holiday strategies. NetElixir is proud to announce our first virtual holiday readiness summit. Connecting the Dots: Holiday Readiness Summit for Retailers is a ½ summit that brings together preeminent retail industry leaders, channel marketing specialists, supply chain experts, and strategic thinkers from Google, Microsoft, UPS, Columbia Business School, and more. Through this webinar, we aspire to help retail and business leaders rethink their holiday approach and innovate new strategies to move forward during this unpredictable year. RSVP for this summit on August 13th to learn 10 key holiday takeaways for this year.

Holiday readiness summit for retailers
Start preparing your holiday strategies with Connecting the Dots: Holiday Readiness Summit for Retailers on August 13th.

Read More On Retail ECommerce Sales During the Coronavirus Pandemic

You can join the conversation on social media using #NxInsights. If you have any further questions, please feel free to email us at shareinsights@netelixir.com.

For further reading, you can see our prior retail analytics updates on retail ecommerce and online shopping behavior: