E-commerce Trends Accelerate

Euromonitor International Research Head Outlines How Trends Will Play Out

E-commerce Trends Accelerate
Digital Exclusive

The ramp up to e-commerce worldwide will only accelerate in the months ahead as businesses and stores reopen and consumers go back to more normal daily activities, according to Michelle Evans, senior head of digital consumer research for Euromonitor International.

During a 40-minute webinar in March, Evans laid out how the trends before the pandemic accelerated during the crisis and companies adapted to the changes with e-commerce plans that will continue to improve in the months and years ahead. With companies merely optimizing their e-commerce capabilities without expanding upon them, Euromonitor estimates that e-commerce sales will grow by $1 trillion between 2020 to 2025, she said. 

Evans offered several examples of companies that did well during the pandemic, including PepsiCo. Within a month, its e-commerce team launched two direct-to-consumer platforms that featured the company’s portfolio products. The goal was to reduce challenges in the supply chain brought on by COVID-19 and increase profitability. Product ordering and fulfillment could be done at the e-commerce sites. 

“This quick pivot is an example of what brands need to do in this fast-changing landscape to meet these ever-evolving shopper needs,” Evans said.

Retailers worldwide, including small businesses, have been seeking new business models, including subscriptions and memberships that offer one-stop services. Although brick-and-mortar stores will continue to offer ways for consumers to touch and see products, the online experiences are now offering more than just the transactional deals that were at the center of the e-commerce model before the pandemic. Technology can elevate the consumer experience and improve brand perception online, she said. 

“Companies now compete on digital capabilities,” she said. “And consumers now judge them on it.”

Retailers and consumer brands that are not investing in technologies will fall behind their digitally focused peers, Evans added. And companies that embrace new and evolving technologies will flourish, including those that figure out the best ways to deliver products that “last mile” to the consumer’s doorstep.

Euromonitor surveys showed that half of the companies that responded intend to improve website performance, she noted. Other surveys showed that more than 70% of the respondents had accelerated digital transformation by 1 to 2 years. And more than 20% said they will accelerate it in 3 to 5 years. 

Companies need to analyze where their products will be sold and the role of stores, while understanding the competitive landscape. She suggested that companies follow the digital front runners in a given industry and determine what investments they are making. Analysis should involve identifying future consumers and what consumers expect, where they want to shop, and then determine if the right consumers are being targeted. 

“Successful retail is meeting consumers where they want to be found, with the products they want to buy at that moment,” she said, pointing out that the pandemic captured a lot of consumers who shopped online for the first time. “Determining that exact time has never been harder.”

Most retailers found out that they needed to improve e-commerce capabilities and rethink their day-to-day operations. For example, the pandemic ushered in a new era of contactless retail and that trend will continue, she suggested. In addition to ordering, e-commerce ramped up the need to provide delivery services. 

In 2020, the expansion of food and drink purchases online was “the headline story,” she said, as consumers searched online for their safety but also to buy hard-to-find products. Worldwide, there was a 53% growth in food and drink purchases, with the U.S. leading that growth. 

While the vaccines will be the catalyst for bringing consumers back to stores, companies will not go back to the way they used to be. Walmart, for example, saw its same-store sales grow by 9% in its last fiscal year, while its online sales expanded by 79%. 

Strong e-commerce results were found in other countries, such as in Singapore, where social media apps were adapted so users could make purchases through them, she said. Of the $123 billion in additional e-commerce sales worldwide in 2020, more than half was in China and the U.S. And that was achieved through optimization of current systems.

Euromonitor International, which was founded in 1972, is privately held and specializes in research on consumer products by doing strategic global market research in numerous areas. 

Thomas A. Barstow is senior editor of FlexPack VOICE™.