By now you’ve all heard the story of how the global pandemic has dramatically accelerated the adoption of digital-first behaviors for both businesses and consumers. From shopping to working to learning, digital became the way people not only stayed connected, but also safer in everyday scenarios like grocery shopping and even seeing a doctor or dentist.
In just the first 90 days of the pandemic, McKinsey documented 10 years of e-commerce adoption. Digital disruption, dating back to the consumerization of the internet and the launch of Amazon.com in the mid-90s, still finds many legacy businesses woefully unprepared for the challenges they face now and in the next normal.
How retailers might have defined digital transformation pre-pandemic has ballooned into every aspect of the business—a digital first operating and customer engagement model had become the way forward.
Now, business as usual has become unusual, one where there was no proven roadmap to not only stabilize the business but keep revenue coming in the door. The silver lining of the past year might just be the forcing function of all these changes allowing retailers to reimagine how they engage with customers.
Going digital is much more than enabling online and in-app transactions, it includes things like introducing chatbots instead of agents to answer simple support questions, powering self-help knowledge bases, or activating all the capabilities of machine learning to track patterns and trends.
With the pandemic heading into its second year, the emerging narrative is now about understanding how digital acceleration will continue to evolve and how retailers will use digital to add additional capabilities and customer value.
Understanding how consumer behaviors and expectations have shifted will help executives determine where to invest, evaluating business models, systems, and enhancing both employee and customers experiences that drive growth today and in the post-pandemic economy.
Global Digital Commerce Continues to Accelerate
To get an idea of how retail and digital shopping behaviors are unfolding during the pandemic, Salesforce just released its Q1 2021 Shopping Index powered by Tableau. The research uncovers [digital] shopping trends based on analysis of over one billion shoppers and 22 billion e-commerce visits across 51 countries.
This research shows that digital adoption continues to soar. For example, daily online spending in the U.S. peaked for Q1 on March 17, growing 117% year over year (YoY).
Further validating the importance of the need for digital investments, global digital revenue grew by 58% YoY in Q1 with two countries experiencing triple digit growth, the Netherlands (108%) and Canada (111%). The U.K. too, experienced incredible digital revenue growth, jumping 91% YoY. At the same time, digital revenue in the U.S. grew by 45% YoY in Q1, which is still higher growth than pre-pandemic levels.
These increases were driven by a combination of overall online traffic growth (27%) and an overall increase in the amount of money spent by shoppers per site visit (31%).
Order growth by device was also notable, with a 34% YoY growth for computers and 59% for mobile devices. In fact, mobile e-commerce grew by 46% YoY across all device types.
With growth rates like these, it is important to point out that not all retailers enjoyed the same level of success. There is no question what consumers were buying in Q1-2020 was impacted by the global lockdown, a ‘homebound economy’ was born, where spending on home improvement was front and center. However, as the world begins to open back up additional categories are seeing growth [luxury Handbags, beauty and makeup, for example].
Top product categories with the most growth in Q1 YoY:
- Sporting goods (101%)
- Home appliances (96%)
- Luxury handbags (95%)
- Food and Beverage (95%)
- Electronics and accessories (91%)
- Toys and learning (85%)
- Beauty and makeup (79%)
- General footwear(79%)
- Home, furniture (72%)
- Healthy and Beauty (72%)
The one category that experienced the least amount of growth was general handbags and luggage, which only experienced 8% YoY growth in Q1. With travel and social activities on hiatus, it’s easy to see why this is the case. However, as the world opens up and as vaccinations become more widespread, this will be one area to watch for increased growth.
Over a Year into the Pandemic Behaviors are Expected to Become Permanent
In the grand scheme of this enduring crisis, it only takes 66 days on average for new behaviors to become permanent. As more and more consumers are introduced to the conveniences, speed, and personalization resulting from exceptional digital experiences outside of retail, retailers are facing increased pressure to reimagine the role stores and store associates play in the shopping journey.
More so, retail executives must reimagine the entire shopping experience with the rise of micro-fulfillment, buy-online-pickup-in store [BOPIS]/curbside/delivery, IIoT/IoT, personalization at the edge, field services, and more.
What’s clear is that traditional customer engagement and retail experiences are not going back to the way they were pre-pandemic. After 20-plus years of digital evolution, the pandemic is ensuring that digital will continue to reshape mainstream consumerism—and that might be the best thing to happen to customers, and ultimately retailers, in a long time.