As March sales and earnings reports start to show up this week, new data indicate that eCommerce sales for essential and nonessential retail will show a dramatic spike. The increase is logical, given the shelter-in-place orders aligned with COVID-19. But recent concerns about supply chains and consumer spending appear to be non-factors in recent growth.
New data released this morning by ACI Worldwide show that most retail categories have seen a 74 percent rise in March compared to 2019 for eCommerce. The most dramatic category has been online gaming, which spiked 97 percent. Other notables: home furnishings, up 97 percent; DIY products, which rose 136 percent; garden, up 163 percent; and electronics, which rose 26.6 percent.
“Long-term, we and others in the industry predict that the shift in consumer behavior – opting for online purchases – is likely to outlast the crisis,” said Debbie Guerra, executive vice president of ACI Worldwide. “The industry is well ahead of the curve in adapting payment methods and ways to combat fraud in response to the changing behaviors and expectations of consumers, which are now being expedited by the lockdown.”
“You see usage, I mean, not only ours, just eCommerce in general, you're seeing huge surges,” said Salesforce EVP Adam Blitzer during a call with Cleveland Research. He added that Salesforce is “seeing many companies [that] are not traditional eCommerce companies,” such as consumer packaged goods (CPG) vendors, embracing online sales.
The home furnishings increase can be seen at Wayfair, which reports that revenue has accelerated as the crisis wears on. After 20 percent growth during January and February, Wayfair saw growth “more than double toward the end of March,” and has maintained that growth rate in early April.
Other categories are expected to show dramatic increases. Purchase intent metrics provider V12 reports that online clothing shopping increased by 200+ percent, led by such brands as Hollister and Urban Outfitters. Meanwhile, eCommerce activity in the footwear category increased by 225 percent, as evidenced by such brands as DSW and Wolverine.
According to Andy Frawley, CEO of V12, “eCommerce has naturally been on the rise for some time. With so many people confined to their homes across the country at this time, we expect eCommerce to continue to spike. Categories such as apparel, home electronics and home furnishings are showing a significant increase.”
The lessons from the crisis that will “stick” in the future are centered on preparation for traffic and product spikes, which will transcend a crisis like COVID-19. Supply chains, advertising and the right fundamentals will need to be in place regardless of the expected burst of activity, whether it’s due to a pandemic or simply a hot product.
“Brands need to be much more nimble to take advantage of bursts in demand, whether it is a pandemic that causes the demand for toilet paper to go up severalfold or a series of YouTube videos on slime that drive up the demand for classroom glue,” says Forrester Research. “Prices on DTC sites also need to be at parity with anything available elsewhere. Solutions like Shopify, drop-ship software from Logicbroker or CommerceHub, marketplace facilitators like Mirakl, and fulfillment third parties such as PFSweb can help companies flex their supply chains and generate their own eCommerce sales on short notice while mitigating expenses when demand is light. Also recognize that there is no shortage of eCommerce talent that brands driven by panic buying can lean on even for the next few weeks.”