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E-commerce business growth slows, but still a boom period

As the world partially reopens businesses shuttered due to the pandemic, new e-commerce tech investments may make gains from earlier this year permanent.

E-commerce business is still growing, but trends indicate that growth rates are slowing down from earlier in the pandemic. Companies continue to pour resources into their e-commerce operations to make up for lost in-person revenue.

Data from three different sources shows that e-commerce continues to thrive despite some states reopening stores with restrictions, such as Massachusetts, which limits the number of customers that can be in a store at once, or Alabama, which puts the onus on employers to enforce social distancing between employees.

In a survey of 600 U.S. adults in households with school-aged children by digital agency TopData, 74% indicated they shopped online during the pandemic; 88% of that group said they planned to continue doing so after it's over. Things they bought online that they'd previously bought in stores included clothing (67%), household items such as toilet tissue (60%), groceries (56%) and cleaning supplies (51%).

An analysis of buying profiles of 220 million U.S. adults that compared 2020 with the Great Recession of 2007-2009, by consumer data firm PreciseTarget, found that overall, apparel and other soft-goods sales will rebound to pre-COVID-19 levels in fewer than three years -- faster than other sectors such as auto and electronic sales, which could take more than five years to recover.

That said, some companies will not pivot to a data-driven e-commerce strategy quickly enough, which the firm predicts could lead to the closing of 30-50% of retail storefronts. Retailers announced 9,100 planned store closings in 2020 as of July, up 55% from 2019. Adobe's Digital Economy Index for July -- which feeds data from a trillion retail website visits and 100 million different items into Adobe Analytics for reporting -- showed 55% growth in e-commerce sales in July 2020 compared to July 2019. While that number is big, previous pandemic months had shown 70+% growth compared to their respective periods in 2019, peaking on Memorial Day.

States that have allowed businesses to reopen have seen e-commerce growth slow down to 8% on average compared to the same period in 2019. The slowdown in e-commerce activity could also be tied the expiration of some unemployment benefits. Add to that uncertainty about whether or not a new round of stimulus checks will come, said Vivek Pandya, Adobe senior digital insights manager.

Consumers opt for BOPIS, curbside pickup

Even with all that data showing e-commerce as a thriving sales channel, investing in online retail is still a leap of faith requiring decisions on what services to build and what technology to bet on. Pandya believes that retailers who invest in buy online, pick up in store (BOPIS) and curbside pickup have seen those investments pay off, as BOPIS orders grew 23.3% in July 2020 compared with July 2019.

A survey Adobe conducted August 4-7 showed that 31% of the 1,000 U.S. consumers queried showed a preference to BOPIS -- and its close cousin, curbside pickup -- over delivery. Before the pandemic, Pandya said, BOPIS was really only popular on a large scale around Black Friday sales, in which shoppers used it to avoid lines at retail stores. During the pandemic, BOPIS gained popularity and Pandya expects it will remain so as consumers become accustomed to the convenience.

"It's been a good channel for customers to acquire goods, and they don't need to go in-store for an extended period of time," Pandya said. "Also, they save on shipping and are able to get their goods locally."

As the BOPIS trend continues to expand, some companies are investing in new ways to serve customers who prefer that route.

In what may have initially appeared as inopportune timing, supermarket parent company Ahold Delhaize ceased Peapod online grocery operations in the Midwest in early February, before the pandemic took hold in the U.S. But it was part of a plan to fold the grocery delivery services into the company's grocery store e-commerce platforms.

Stop & Shop, an Ahold Delhaize supermarket chain in the U.S. Northeast, folded its Peapod app into its e-commerce platform last week, migrating Peapod customer data into the Stop & Shop operations and adding it to the chain's in-store loyalty program. The move came in conjunction with opening up more non-store "wareroom" e-commerce fulfillment sites, bringing the total to 24.

Stop & Shop storefront
Supermarket chain Stop & Shop relaunched its digital experience on a new e-commerce platform in mid-August.

Stop & Shop has increased its e-commerce staff to deal with "unprecedented surge in demand" for home delivery and pickup, according to a company spokesperson. She added that the technology helps solve pandemic-specific logistical issues, such as putting limits on certain high-demand items that are in a national shortage and supporting contactless delivery to customers' doorsteps. 

Walmart recently added a new e-commerce service, a Yahoo Mail integration, to its consumer sales channel. Customers can order groceries for pickup directly from their Yahoo email account. The move competes with the Amazon-Whole Foods grocery juggernaut by making it easier for Yahoo Mail's 900 million users to shop Walmart online.

Yahoo Mail and Walmart shopping integration screenshot
Yahoo Mail app integrates with Walmart's shopping back-end, along with other retailers'.

Grocery e-commerce operations are very complex, with deep inventory systems, said IDC analyst Jordan Jewell, who expressed skepticism about Walmart's Yahoo Mail gambit. Add to that variables such as produce weight, a customer's dietary and food allergy needs, and food expiration dates.

"Those are things that email is not well-suited for," Jewell said, adding that functions such as converting ingredients lists from recipes to grocery orders is even more difficult -- a popular feature shoppers request. "But they can probably make it work, because Walmart is very smart."

Launching new e-commerce in the pandemic

Hannah Sowers planned to open a store in Bothell, Washington for her boutique CBD business, Union of Elements, before the pandemic. She quickly pivoted to an online store and launched at the end of April, using e-commerce vendor BigCommerce's drag-and-drop tools to spin up while keeping design and site-development costs down.

While Sowers and her team still hope to open a store, the e-commerce operation has kept her business afloat.

We are 100% direct-to-consumer, and the original idea was physical [retail] ... but opening a physical store during COVID would have been disastrous.
Hannah SowersOwner, Union of Elements

"Launching during COVID has been an interesting experience, to say the least, and it certainly wasn't part of the business plan at all," Sowers said. "We are 100% direct-to-consumer, and the original idea was physical [retail] ... but opening a physical store during COVID would have been disastrous."

Brakes, a large U.K. wholesale food supplier, had no consumer e-commerce footprint until the pandemic shut down England in March. The company lost its commercial business for restaurants and other facilities as stay-at-home orders took hold.

Brakes had to think fast and come up with an e-commerce channel to keep food in its warehouses from spoiling and keep its business going. Using its SAP tech stack that covered inventory on the back end, it spun up a consumer-facing SAP e-commerce site based on its B2B ordering-system code base, and quickly redeployed its delivery trucks to bring meals to hundreds of thousands of U.K. residents, as well as hospital-quarantined COVID-19 patients.

"They still had their supply chain, their product data, their warehouses and their vehicles intact," said Ben Sekhon, Head of SAP customer experience for the U.K. and Ireland, who worked on the Brakes e-commerce site. "Technology can be an enabler to repurpose a lot of that technical information to a direct-to-consumer use case."

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