How E-commerce is Taking Over the Retail Industry
Julia Beck
Black Friday, the largest shopping event of the year, marks the start of the holiday season, and one of the most profitable days for retailers. The COVID-19 pandemic has caused drastic losses in sales for large and small companies alike, which placed extra weight on the success of Black Friday 2020 to breathe life back into these companies. One way that businesses are adjusting to the pandemic’s effects is by taking a stronger online presence for consumers to do their shopping from the comfort of their living rooms. E-commerce has been a steadily growing industry for the last several years, however, its importance and convenience has been emphasized by the last 9 months, and it’s growth will not be slowing down anytime soon.
To recognize the impact of online retail this holiday season, we have to look at the numbers over the years. In 2002, U.S. shoppers spent a total of $416.4 billion on holiday shopping between the days of Thanksgiving and Cyber Monday. By 2019, that number was up 75%, to $730.2 billion (The Balance). As mentioned earlier, thanks to the pandemic, online shopping rose to a record high this year, with consumers spending $9.0 billion online this Black Friday. This was a 21.6% increase since last year, which boasted a total of $7.4 billion, according to Adobe Analytics data (CNBC news). Adobe Analytics further outlined the spending habits and found that consumers spent $6.3 million per minute online, and that shopping off of cell phones rose 25.3% this year, reaching $3.6 billion and representing 40% of total e-commerce spending (CNBC). The availability of technology and online business platforms has paved the way for an unprecedented amount of online spending, and companies are continuing to build and perfect their online presence to increase their sales.
The success of current online shopping platforms can be credited to the increase in online services provided by stores even when their brick and mortar locations were closed. People were able to have their groceries delivered to their cars, receive their online orders within days, and take advantage of many free shipping opportunities. These experiences drove home the idea that e-commerce is simply easier for most consumers. Despite the fact that most storefronts opened back up again, the trend of online shopping isn’t going anywhere. A new survey from PYMNTS found that nearly 36% of U.S. consumers are now buying retail goods online, compared to 29% doing so in mid-April, during the shut down. The increase is also consistent with consumers ordering from restaurants online, even though most restaurants have reopened with socially distanced dining accommodations (Forbes). Online retail is continuing to grow, regardless of how the pandemic is slowing passing.
To show the global reach of e-commerce, look at the image below and recognize the growth in e-commerce sales throughout the world over the last six years and the projected growth over the next three.
The image above represents the facts that ecommerce is not just growing in the United States, but in the rest of the world as well. Online shopping is one of the most popular online activities around the world, and with technology development rapidly growing, it is no surprise that the online retail market is predicted to grow substantially over the next few years.
Works Cited
Amadeo, Kimberly. “What Is Black Friday?” The Balance, 31 July 2020, www.thebalance.com/what-is-black-friday-3305710.
Brophy, Meaghan. “31 Online Shopping Statistics You Should Know for 2020.” Fit Small Business, Fit Small Business, 30 Sept. 2020, fitsmallbusiness.com/online-shopping-statistics/.
Corkery, Michael. “Black Friday Live Updates: Holiday Shopping in a Pandemic.” The New York Times, The New York Times, 27 Nov. 2020, www.nytimes.com/live/2020/11/27/business/us-economy-coronavirus.
Lauren Thomas. “Black Friday 2020 Online Shopping Surges 22% to Record $9 Billion, Adobe Says.” CNBC, CNBC, 28 Nov. 2020, www.cnbc.com/2020/11/28/black-friday-2020-online-shopping-surges-22percent-to-record-9-billion-adobe-says.html.
Maheshwari, Sapna, and Michael Corkery. “'Bleak Friday' for Stores as Pandemic Pushes Holiday Shopping Online.” The New York Times, The New York Times, 30 Nov. 2020, www.nytimes.com/2020/11/30/business/black-friday-retail-sales.html.
Morgan, Blake. “More Customers Are Shopping Online Now Than At Height Of Pandemic, Fueling Need For Digital Transformation.” Forbes, Forbes Magazine, 27 July 2020, www.forbes.com/sites/blakemorgan/2020/07/27/more-customers-are-shopping-online-now-than-at-height-of-pandemic-fueling-need-for-digital-transformation/?sh=1f27b8b76bb9.
The retail market has been affected drastically by the pandemic, and e-commerce has become a habit for a lot of consumers around the world. One thing that is important to point out is that shopping online can be a saving factor for a lot of businesses if they are well known, but for many local, small businesses shopping online harms them more than helps them. This is because they don't have enough business to make a profit off of online shopping and shipping costs, and therefore larger firms take focus. Before the pandemic, small businesses could thrive because people would go shopping to pass time, but the pandemic pushed the idea of online shopping to the front and formed a habit that isn't going away - just like you mentioned in your post. I didn't know that the percentage of online shopping went up to 36% from 29% and I find that change really interesting, and I am interested to see how that percentage changes in the future.
ReplyDeleteI thought that it was interesting how even though the COVID-19 pandemic hit, sales for online shopping were up considering that there were many americans who lost their jobs due to the pandemic. One thing that I am curious about, is if the amount of ecommerce went up ny 75 percent from 2002 to 2019, what will that look like for the future? Another question that I have because in the article it was mentioned that ecommerce is easier for most people than going into the brick and mortar location, would you think that soon all shopping would switch to online? If shopping was all line prices would be able to go down, considering that the companies would not have to pay as many employees.
ReplyDeleteI thought that it was extremely interesting how online shopping went up 75% between Thanksgiving and cyber Monday. Do you think that this will continue into 2021 as Covid-19 continues to grow. I did expect a rise this year but I never could of imagined that it would of went up that high. I still think its interesting that the USPS is struggling despite all the business that they are receiving through the online shopping.
ReplyDeleteGreat Job Julia, your blog was very detailed and easy to understand. I really enjoyed how you choose a topic that was so recent like Black Friday and Cyber Monday and really broke down the analytics. It makes a lot of sense because of the global pandemic that retailers aren’t making as much as they were retail wise, but online business is booming. Of course it isn’t the same for the retail business, but they should still be making a large amount of money from their websites to provide the customer with another opportunity to buy products. Of course the numbers of in store shopping aren’t as significant the online portion is limiting the damage. I have witnessed this change in my family’s shopping this year and my dad’s business, but how has the pandemic affected your holiday season shopping?
ReplyDeleteWhile some may argue that the pandemic has made all sales to be low during this Black Friday since people do not want to be out shopping or in largely populated areas, your point of the growth in online shopping counters this notion nicely. I love the concrete evidence that you incorporated that swayed my opinion (I thought before that people wouldn’t bank on Black Friday this year and it would be more spread out throughout the surrounding week); you stated that “This was a 21.6% increase since last year, which boasted a total of $7.4 billion, according to Adobe Analytics data (CNBC news)”. A 21.6% increase in sales is a crazy increase considering last year Black Friday was pandemic free. Now, granted this was a majority of online shopping, after the economic hit that the US took, it’s a little surprising that people would be spending more. The only thing I wish you touched more on was the method stores were using this year by having their deals drag out for the entire week to limit people inside the store.
ReplyDeleteOnline shopping has definitely gone up over the last year. I usually go out on Black Friday to do holiday shopping, but this year was a lot different. It makes sense that there was a 21.6% increase in online spending this year due to covid, but I wonder if the growth in online spending will be less in the next few years if the pandemic becomes under control? Obviously people are still going to be buying things online more and more in the future, but I would imagine that at least in the first few months when things get back to normal, more people will want to go out to stores. I think this year also was a jump ahead for online retail because it showed people what was possible with online shopping. Either way, online retail will definitely have an increased impact in the future, and it may cut down the need for physical stores, giving companies more money to use elsewhere.
ReplyDeleteE-commerce has caused a huge stir in the economy by availability alone. Anyone would likely take the opportunity to shop online if it means they don't have to get up and go to the store. While a 75% increase is money spent since 2002 during the time between Thanksgiving and Cyber Monday is a huge increase, it makes total sense. E-commerce has not only made it easier to shop over the holidays, it allows access purchasing items one otherwise wouldn't have been able to. The pandemic has only made it more prevalent. It would seem that there are very few downsides to online shopping, and I don't think there are many since almost every retailer has the ability to shop online these days.
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