Online Shopping Boom Here to Stay?
Is the online shopping boom here to stay, and should your long-term distribution model reflect the shopping trends we experienced in 2020? Let's examine the way e-commerce has changed in 2020 and attempt to predict the future of online shopping.
What do consumers say about future behavior?
McKinsey & Company’s Perspectives on Retail and Consumer Goods reports on the acceleration of behaviors over the past year. Their report shares that online delivery made 10 years’ worth of advances in just eight weeks.When consumers were polled about their current and future shopping habits, 77% of shoppers who opted for online shopping in 2020 said they plan to continue the practice going forward.
How are businesses responding?
As we mentioned in last week’s blog post, businesses like Target, DICK’S Sporting Goods, and Lowe’s are ramping up their Ship From Store (SFS) offerings. This shift resulted in “sales of over $2.8 billion, an increase of 100%” for DICK’S.Williams-Sonoma utilized buy online, pickup in store, and SFS to increase their total sales by over 130% in Q4. On their Q4 2020 earnings results call, Laura Alber, President, CEO & Director, committed to increasing their “U.S. manufacturing and fulfillment capability by over 20% to 30% next year including adding close to 2 million square feet of distribution space to our delivery network.”
With Amazon accounting for nearly one-third of all e-commerce in the US, other brands are ramping up their strategies to compete with Amazon’s fast, free shipping.
In Shopify’s report on the Future of E-Commerce, David Moellenkamp, Shopify Plus’ director of automation, reported that “More than ever, the last few months have been dictated by what buyers need rather than where merchants wanted to take that. Over the past few months, our merchants have become much smarter, much more adept at understanding buyer mindsets, and how important safety and timeliness is to buyers.”
Online shopping isn’t going anywhere and is expected to continue to grow in the coming years. In order to be successful in this e-commerce-driven future, it’s important to be prepared. Make a plan for fast shipping with low (or free) costs to the consumer and take the time to understand your customers’ needs.
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