“There are three types of lies: Lies, damned lies, and statistics.” The UK Prime Minister, Benjamin Disraeli, said that. Or at least, Mark Twain said that Benjamin Disraeli said that. The dubious origin of the quotation aside, the fact remains that statistics can be a can of worms, to say the least. When it’s ecommerce statistics pertaining to the trillion-dollar industry people tend to get a little bit passionate about their numbers.
Statistics don’t always have to be the boring mainstay of drab meetings. They are, but they don’t have to be…
Add to that passion the heightened stakes of a world experiencing its first real global crisis since World War 2 and people start to throw around statistics with reckless abandon, usually while shouting… Heck, in the last week I’ve seen articles from a single reliable source declaim that
a.) the post Covid19 world will be unrecognizable;
b.) the post Covid19 world will be unrecognizable, except for certain things that will remain largely the same; and
c.) the post Covid19 world will be pretty much the same and people need to relax. That’s a pretty wide range of possibilities right there.
This reaction is largely due to the uncertainty that the Covid19 pandemic has spread around the world. I’m going to try and negate this uncertainty by taking a look at what the statistics mean for the eCommerce world in a calm and logical way. I’ll be doing this by:
- Looking at eCommerce statistics pre Covid19
- Looking at eCommerce statistics during the novel coronavirus pandemic
- Preparing a sound strategy for whatever world will appear post Covid19
If you were looking for an article claiming a bright new future for the world of eCommerce, built on the smoldering ruins of brick and mortar shops, you’ll be sorely disappointed. If, however, you were looking for a sober analysis of the numbers and what they mean, step right this way…
Social Media remains a force in the eCommerce world. However, it is also a great tool to optimize your Conversion Rate!
I. eCommerce Statistics In A World Before Covid19.
These ecommerce statistics are from a simpler time, a time when a handshake and physical contact was not frowned upon. They are stated here to show us where we were, the past that we leave behind on our journey towards a post Covid19 world.
- “Only 8% of total retail sales in the USA are coming from online sales.” (Smartinsights, 2017) Some ecommerce statistics sources put the number at 13% (SaleCycle, 2017), but even so, it is still an extremely encouraging number, hinting at massive potential growth. Whether the Covid19 pandemic causes this number to spike or shrink, it will remain a win-win scenario for well-prepared businesses. This is due to the fact that if the amount of sales decreases, let’s say due to an economic recession, it will provide opportunities for growth for those businesses that have managed to weather the storm. On the other hand, if the Covid19 pandemic causes a sizable increase in sales it means that the industry has added customers who’ve previously avoided online shopping. Obviously, this means an increase in the customer base, but more importantly, it signals a change in customers’ buying behavior.
- “Shopping online is preferred across generations, as 51% of all Americans, 67% of millennials, 56% of gen X prefer shopping online. However, at the same time, 64% of Americans’ shopping budget is spent in store, compared to only 36% online.” (Entrepreneur, 2017) This contradicting statistic shows that there’s something missing in the way shops present their products online. If a whopping 51% of US consumers indicate they want to buy online but only 36% of their budget ends up online, then online businesses need to reevaluate the way that they do business. The most effective way is to look at the shop’s conversion rate, ie. the number of visitors who actually end up making a purchase. The truth of the matter is that many businesses overspend on ads directing customers to their store, only to lose that hard-won customer when they get to the business’ landing page. But more of this later…
- “Of the 51% of Americans indicating that they prefer to shop online 58% cited the ability to shop 24/7 on such platforms as the main reason for their decision.” (Entrepreneur, 2017) This stat show’s the most important reason why eCommerce has such a bright future ‒ convenience. Looking at these ecommerce statistics one can easily come to realize that the age of going to the mall for some retail therapy is a thing of the past. Now we have retail therapy waiting for us when we get back from a long day at work, either in a couple of hours spent browsing through an online shop or in nice cardboard boxes from UPS or DHL.
The future before Covid19 was bright indeed…
- “By the year 2021, worldwide retail eCommerce sales will reach $4.9 trillion” (Shopify Plus.) This number will definitely need to be revised downwards. While eCommerce saw a spike, both in the number of visitors and transactions, it is unlikely that this trend will continue. With the US unemployment rate climbing to 15% and economists warning of a recession, if not a full-blown depression, we need to prepare for a bumpy ride. The closure of brick and mortar shops does not imply a bountiful harvest for eCommerce shops
- “By the year 2040, as much as 95% of shopping will be facilitated by eCommerce” (Nasdaq, 2017) This statistic, prophesying the future dominance of eCommerce, ought still to be true. However, this stat is often cited out of context, implying that brick and mortar shops will be a thing of the past. This is false ‒ the caveat of the statistic lies in the word “facilitated” implying a future that we can only speculate about
II. eCommerce Statistics In The Time Of Covid19.
These ecommerce statistics show us where we are today. When going through these we need to remember that most of the world is not even 60 days into a state of a lockdown or social distancing. To act on predictions based on these 60 days would be reckless at best and devastating at worst.
The early impact of Covid19 on industries in France. Tourism and luxury goods suffered the most.
- “The Global loss in the retail sector will likely hit $2.1 trillion in 2020 and take four years to overtake the levels of growth seen before the pandemic.” (Forrester, 2020) One of the staggering ecommerce statistics. But the thing is we hear numbers like this all the time. We’ve become, so to help myself understand this number, I’ve decided to write it out: $2,100,000,000,000… That’s a whole bunch of zeros! That number is out of this world. In fact, if I were to have $1 for each star in our galaxy I would have a paltry $250 billion dollars, or $250,000,000,000 – enough to be twice as rich as Jeff Bezos but nowhere near $2.1 trillion. To further illustrate how massive this number is: it’s $16 billion more than the gross domestic income of Italy! The damage that this pandemic will inflict on the economy is gargantuan, so now is not the time to be cocksure and flippant. Now is the time to buckle up and prepare for a rough ride. Speaking of Jeff Bezos though…
- “Global sales on Amazon increased by 26% in Q1 2020, reaching $75.5 billion, compared to sales of $59.7 Billion in Q1 2019.” (Amazon Q1 2020 Results, 30 April) This specific stat gets bandied about a bit by people trying to show that all is well in the eCommerce world. Yes, it’s true that more customers have decided to shop with the retail giant in the last couple of months. But what these people fail to mention is that during this time Amazon actually only saw a modest gain due to higher operational costs in dealing with the challenges that Covid19 creates. This ecommerce statistics just further illustrates that caution should be the mantra when dealing with these new stats.
The total number of eCommerce visitors saw a sharp increase during the early days of Covid19.
- “Since social distancing has become a way of life, the number of online shoppers in New York, specifically, has increased by 37 percent since the beginning of March 2020.”(Klaviyo) This, at least, is encouraging, though it is yet to be seen how long this purchasing power will remain with an economy that is straining under the effect of the Covid19 pandemic. These purchases were initially categorized into essentials (those products needed for survival) and non-essentials (everything else), but soon some interesting purchasing habits saw the light of day…
Nobody could predict the rise of the so-called ‘New Essentials.’
- “A brand new supercategory, dubbed ‘New Essentials’, has emerged experiencing dramatic growth when compared to Essentials and Non-essentials.” (Klaviyo) New Essentials basically encompasses everything that consumers need to help maintain their individual happiness and well being. It could be video games for one person or a pair of shoes for another. This purchasing habit was almost universal, with even people who recently lost their income reporting that they’ve made this type of purchase. In fact, some data actually indicates that those people who were recently laid off or lost their income were more likely to spend their money on these types of items.
- “Social media engagement is at an all time high.” (ModernRetail) This is hardly surprising, given the fact that people have loads of free time on their hands. But this is also a brilliant opportunity for brands who decide to use these challenging times and conditions to prepare for what is still to come.
III. The Road Ahead – Preparing For eCommerce in A Post Covid19 World
We find ourselves in a unique moment of time. Personally I believe this is the calm before the storm, the moment that the sea pulls back in anticipation of the tsunami. We are left with a choice – stand and stare at the fish left gasping for air or run to higher ground and prepare for what’s to come. I also believe that the ‘higher ground’ is something we all know, but regularly overlook – Conversion Rate Optimisation
- “For every $92 spent on acquiring a customer, just $1 is then spent on trying to convert them.” (Econsultancy) This stat just does not make sense. To spend all that money, drawing customers to your store and then neglecting to get them to purchase anything… well, it’s just stupid. Imagine talking to someone who tells you they have a brick and mortar shop and their business model is to have a monthly spend of $920 on advertising and $10 dollars on in-store salespersons. You’d run for the door as soon as this person starts handing out business advice! Yet, for the most part, we are that person, overspending on ads and underspending on conversion…
- “A typical website conversion rate is about 2.35%” (Wordstream) Wow, talk about depressing… But that does not need to be the case. The top 10% of companies are seeing 5x higher CRO rates. However, small to medium scale businesses rarely have the same types of resources of the top 10% of companies. That is why I recommend a couple of tips to amp your CRO or enlisting the help of a CRO app like PageFly.
(That is if you are using Shopify, of course. If you are not, then I strongly recommend using Shopify, because you’ll get access to great apps like PageFly!)
Some of the reasons behind the dreaded ‘abandoned shopping cart’ – a sure sign that something is wrong.
- TIP: “As much as 48% of all landing pages contain multiple offers.” (Wordstream) Multiple offers on a landing page are the cardinal sin of CRO. Having more than one offer can decrease your conversion rate by up to 266%! When it comes to your landing page, less is definitely more!
- TIP: “Using videos on landing pages on average increases conversions by 86% (Unbounce) People like to see movement. We are basically T-Rexes with credit cards. Get a nice video on your landing page and you’ve almost increased the CRO by 100%
- TIP: “An overwhelming 84% of people won’t make a purchase online if they are dealing with an unsecure website.” (Blue Corona) Security is a deal-breaker when it comes to online shopping. This is another reason why I recommend a platform like Shopify, cause they take care of the security and SSL certificates for you. It really is that easy.
Products like PageFly make managing your CRO easy and hassle free.
A Final Thought.
As the saying goes, we are most definitely living in interesting times. But for the levelheaded business owner who’s able to keep their eyes on the shoreline during this storm, it represents a moment for preparation. Like Winston Churchhill said, “Never let a good crisis go to waste.” Best of luck, stay safe and well, and go optimize some conversion rates!