The E-Commerce Landscape: What Has Changed 2 Years Into The Pandemic

Today’s e-commerce landscape is almost unrecognisable compared to how it looked just over 2 years ago. The pandemic has caused online retail to step into the spotlight and become a necessity for many brands. Online retail sales as a percentage of total retail sales were sitting at around 19% in February 2020. A year later, it had skyrocketed to close to 35%, and at the closing of last year had gone up an additional 19%.

Today’s e-commerce landscape is almost unrecognizable compared to how it looked just over 2 years ago. The pandemic has caused online retail to step into the spotlight and become a necessity for many brands. Online retail sales as a percentage of total retail sales were sitting at around 19% in February 2020. A year later, it had skyrocketed to close to 35%, and at the closing of last year had gone up an additional 19%.

The rise of e-commerce has brought about many changes, most of which are happening behind the scenes.

COVID E-commerce Trends  

The digital economy boomed during the COVID-19 crisis. As people embraced social distancing, they turned to online shopping more than ever before. 67% of consumers report they shop differently now due to COVID-19.

Retailers stepped up to the challenge, not just by supporting more online sales, but by embracing emerging technologies that created connections with shoppers or made their customer experience more convenient.

1. New trending product categories.

Grocery e-commerce soared in the second week of March 2020. “In a matter of months, the grocery e-commerce landscape in North America accelerated by three to five years,” wrote analysts at McKinsey, who also provided the below data:

  • 20-30% of businesses moved online during pandemic’s peak
  • Online grocery penetration settled at 9-12% at the end of 2020

With the broad expansion of product categories shoppers are likely to order from online retailers, Walmart grew its digital grocery business in 2021, and eMarketer says they’ll outsell Amazon in that category this year.

Home goods and fitness products saw sales growth, too. Recreational goods spending increased by 18% due to increased spending on home gym equipment and the furnishings and household equipment sector grew by 5.7%.

Will these trends last into the transition to the “new normal”?

While grocery e-commerce growth penetration is expected to continue, to reach 14-18% in the next three to five years, some analysts think home goods and fitness spending will cool.

2. Lower loyalty. 

For a wide variety of reasons, consumer loyalty to their typical brands has fallen. eMarketer reports that in mid-2021 more than 80% of consumers reported buying a different brand than usual — and that’s a trend that started early on in the pandemic. Today’s reasons are typically around lower prices (65%) and out-of-stock products (51%).

3. Contactless payment.

It’s not practical to expect that online transactions could replace every single in-person purchase. That’s why big strides were made over the course of the pandemic in various contactless payment options.

eMarketer reports that the number of people globally who used proximity mobile payments in 2020 grew 22.2% year over year.

4. Coronavirus-friendly fulfilment.

While some shoppers turned to digital commerce, others made use of new or expanded pick-up or delivery options from their local, physical stores.

Thanks in part to grocery stores enabling online purchases, third-party delivery providers like Instacart partnered with them to accelerate delivery services, and food delivery companies like DoorDash and Uber Eats began including grocery delivery as well.

And curbside pickup, both from restaurants and brick-and mortar-stores, particularly gained momentum as a contact-free way to pick up their purchases on their own time.

5. Social media shopping.

Several social media platforms took advantage of higher online retail demand by adding more commerce features, enabling shoppers of participating online retailers to browse and purchase products without ever leaving the platform. These platforms are typically closely integrated with e-commerce platforms so that e-commerce operators can easily promote their products in multiple places.

In 2020, social commerce made up 3.4% of total e-commerce sales, and that percentage is expected to continue rising.

However, social platforms are offering more opportunities than ever to contribute to total retail sales, it’s not just through on-platform shopping.

The majority of Millennials and Gen Z think social media platforms are better places to learn about new products than online search.

Contact us today to find out more on how we can help you get your products seen on social media.