Q2 Data Shows Rapid Acceleration of eCommerce Adoption

A new report from eMarketer cites Commerce Department data shows that U.S. eCommerce spending grew by 44.5% year over year in Q2. Online sales jumped 31.8% from Q1 to Q2. This reflects that Americans spent most of Q2 in COVID-related lockdowns. By contrast, lockdowns only began late in Q1.

Online sales accounted for 16.1% of total sales in Q2. Let’s put this in some context. Online sales accounted for 10.8% of total retail in Q2 2019. This is a massive, if not unexpected, acceleration

As my Localogy colleague Dan Hight noted in a LinkedIn post, “Years of gains were made in a matter of months. This is not likely to go back, so how will this impact retailers in the long run?”

Still, the massive growth in eCommerce hasn’t managed to completely offset the devastating impact the pandemic has had on retail overall. Total retail sales fell by 3.9% from Q1 to Q2.


No Turning Back

These figures are dramatic, but as noted, unsurprising. We’ve seen existing ling-term trends have their trajectory accelerated, often by many years, because of the pandemic. Others include the shift to remote work, adoption of online and mobile payments, and the related movement away from cash.

eMarketer doesn’t anticipate any meaningful pullback in eCommerce once the pandemic fades. It estimates eCommerce will have a 14.5% share in 2020, up from 11% in 2019. In fact, this is the largest ever year-over-year share increase that eMarketer has measured. It began tracking this in 2008.

SMBs Catching Up to eCommerce

The massive shifts caused by the pandemic caught many small businesses off guard. But small businesses have adapted. And Localogy’s Modern Commerce Monitor™ small business tracking study has measured this adaptation since the pandemic landed.

The most recent wave, V-III, found that small businesses have adopted a wide range of technologies to help them shift to online and contactless sales. In fact, 56% of SMBs told use they have invested more in their digital presence and eCommerce capabilities since the crisis began.

In order to adapt, small businesses are tapping into a range of resources to get started selling online. The most common tactic (38%) is selling via an online marketplace like Amazon. Another 21% said they’ve begun selling via a DIY eCommerce platform like Shopify.

Acceleration Theme at Localogy 2020

Acceleration is also a central theme at the upcoming Localogy 2020 virtual event. The following session will tackle how the rapid growth of eCommerce is impacting the future of retail.

eTail Triggers Retail Transformation
Six months ago, eCommerce was on an expected linear trajectory of growth. That curve has been disrupted. Even before COVID-19, retail was undergoing restructuring. With the explosion of eCommerce and the implications of COVID-19, the size, scale, configuration, and experience of retail will be radically altered.

Naveen Jaggi, JLL
Ken Madson, Mad Creative Production
More from Localogy

Google’s Shoploop Rides the eCommerce Wave

Instagram Opens eCommerce to SMBs

Wix Launches eCommerce Tools, Including Payments

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