Retail Trend 10: Surging Online Demand
The last half-year has been a whirlwind, and it feels like old news at this point to say that ecommerce has moved on 10 years in the past 6 months.
After the initial lockdown panic settled, it was clear that online sales had ramped up. When those sales began to decline again in June and July our clients were concerned that they were the only ones seeing this decrease in orders. We decided to analyse the lockdown impact and generate some benchmark sales figures to form a view of what our customers were seeing across the board and what the near-future of ecommerce for retail was looking like.
We aggregated the sales figures for all of our clients who are targeting the Irish market for ecommerce and averaged them to create a ‘benchmark’ monthly figure for 2019 and 2020.
On the left is the graph we generated for Revenue. The blue line is the benchmark for 2019. As a rule, at StudioForty9 we target 30% YOY growth for our clients. This is a key target that focuses the work we do with clients over the course of a year. So for 2019, you can see a nice gentle upward trend with the standard uptick for November and December.
The green line is 2020, and here you can see the extremely obvious and aggressive peaking of revenues in March (already surpassing Black Friday 2019), April and May. The peak in May is nearly four times the November results for 2019. This marks an incredible shift towards, and a reliance on, Ecommerce sales both for customers and for retailers.
While the results began to taper off as the lockdown eased, you will remark that each month from June to August 2020 is still significantly higher for Revenue than November 2019.
What this shows is a phenomenon we’ve seen a couple of times over our own career here at StudioForty9: it’s a step change in behaviour and attitude amongst the shopping public.
The last major one was when Black Friday properly took off. Many readers will remember the year that Black Friday really “landed” in Ireland and all of a sudden everyone was talking about it. Any retailer participating in online sales for Black Friday was seeing multiples of their previous best months, sometimes even a year’s worth of sales, within the period of just a long weekend.
What happens after a step change like this is that everyone impacted lands higher up the shoreline. After that Black Friday, revenues did of course taper back down, but where they levelled out again was much higher than where they were only months previously – and they stayed there.
We’re seeing a similar pattern here, and that pattern is visible and holding across most ecommerce KPIs.
We can see the pattern in the Conversion Rate KPI, which was already improving really well at the end of 2019 and coming into 2020, owing to a lot of work completed in mobile UX and site speed. But again, it really took off after March – a sign of the far greater intent to purchase on behalf of visitors to sites.
Again, we see that sessions increased dramatically and interestingly have not tapered off at the same rate as Revenue, indicating that people are researching more, and probably checking sites for opening hours and information about how to engage with a retailer in the post lockdown world.
But interestingly, Average Order Value remained static – so that’s still a major opportunity for retailers this peak season!
Overall, there is compelling evidence to suggest that the future of retail is moving online at a greater pace owing to the impact of Covid-19. From what we see behind the scenes, retailers are embracing this fact and working hard to improve both online and instore offerings in line with the new normal and in anticipation of what the future holds for growth across all retail channels.