Explosive e-commerce sales are on track to top out at £3.9tn before 2020 mercifully ends, according to a new calculation by GroupM.
For its first-ever e-commerce forecast, GroupM tabulated estimates of historical and forecasted consumer e-commerce in the world’s largest retail economies to gain insight into how the sector has profited from the disruption of 2020.
The Drum sifts through its findings for the choicest morsels.
E-commerce rides a meteoric rise
GroupM drew upon proprietary e-commerce data drawn from selected territories to build the data models that informed predictions made in This Year, Next Year: E-commerce Forecast Report.
Chief among them is that global retail e-commerce will hit a staggering $3.9tn in 2020 – the equivalent of 17% of all retail sales.
The figure is all the more impressive for excluding food and delivery services, omitted to prevent skewing the results between different markets.
Purveyors of consumer packaged goods have been on the leading edge of a pronounced transition in how their products are procured, riding a scarcely believable 277% increase in retail sales versus e-commerce channels through the year.
This trajectory is expected to be maintained for the foreseeable future, hitting $7tn in 2024 (a 25% market share) before surging further through to 2027 when e-commerce sales could stand at $10tn – assuming annual double-digit growth can be maintained.
Behind all these projections has been the global pandemic, which has turbocharged pre-existing trends away from bricks and mortar retail towards e-commerce.
This is evidenced by Nike, which does not anticipate any reversion by consumers to the pre-pandemic means and is betting that footfall at its physical stores will never fully recover, prompting it to focus its energies on online sales.
A similar view has been taken by Wallgreens, which has treated this year’s events as a ’wake-up call’ to crack on with its e-commerce and marketing strategy.
A herd stampede toward e-commerce and video saw global ad spend surpass analyst expectations for 2020, with global ad spend now expected to contract by a mere 7.5% to $587bn – versus prior fears of a 9.1% fall.
What’s the takeaway for marketers?
These unprecedented shifts have presented a highly dynamic situation for marketers that are increasingly prioritising cross channel strategies to reach online shoppers.
Left in the slipstream, physical retailers are forced to reappraise their entire retail management, store layout, location and customer service strategies to stem the bleed.
Amid this state of flux, social commerce has emerged as an important plank of any e-commerce strategy that is worth its salt.
Christian Juhl, global chief exec of GroupM, remarked: ”There’s a huge opportunity in e-commerce for brand building, tying clients’ online operations to their media activations across channels. The pandemic has accelerated that need and shown clients how valuable e-commerce is for brand building.
”We’ve built a proprietary data model that lays out the trends and where incrementally increased investment may be necessary. Since e-commerce strategy’s impact on brand building leads to stronger immediate performance, brands should have a particular interest in focusing on this space now and for the foreseeable future.”