By Kevin Kogler
Published in RSPA Community Connect Magazine May 2021
As COVID-19 swept across the United States in 2020-21, it not only impacted public health, but also almost every industry and business sectors. As States issued stay-at-home orders in an attempt to slow the spread of the disease, many Americans began self-isolating – turning to online technologies for work, education, communication, food and shopping. Some industries experienced positive impact (healthcare and grocery), some were mixed (restaurants and real estate), while others were hit hard (travel and tourism). One trend that was particularly noticeable was the shift from instore dining and shopping to online ordering and ecommerce.
Impact on Shopping and Ecommerce
Sales were already steadily shifting from physical stores to ecommerce sites prior to 2020, but this growth was accelerated by COVID. According to a survey by Statista in May 2020, around 62% of people surveyed reported going to the shops less, while another 52% reported shopping more online. Even those who had never used e-commerce services at home the past felt motivated to do so given concerns about the virus.
For the past 10 years, ecommerce grew an average of 15% year-over-year. In 2020, the growth was 2x the historical average. According to data from Marketplace Pulse, U.S. ecommerce sales grew 32% in 2020 to $790 billion, up from $598 billion in 2019. As a percentage of total retail spending, ecommerce represented 14% of total U.S. retail sales in 2020, up from 11.3% of total retail sales in 2019.
The growth rate of ecommerce is expected to slow as the physical retail market reopens, but the long-term trend is towards continued growth of ecommerce, as many consumers have gotten used to the convenience of ordering online, and many people that historically did not shop online were forced to do so by the COVID restrictions.
So, what are some key ecommerce trends?
Large online marketplaces will experience record growth – Amazon was the biggest winner, growing significantly during initial lockdown periods and with greater fulfillment capacity than its competitors. Amazon’s annual revenue increased 38% to $386 billion—an increase of over $100 billion year-over-year. Walmart and Target also thrived.
- Customers expect a convenient customer experience – All types of retailers made investments in curbside pickup and same-day delivery options. These are two trends that are not expected to go away in 2021, as they have been met with a largely enthusiastic response from shoppers.
- Popularity of online grocery will continue – A study by PwC Global found that 63% of respondents are buying more groceries online or by phone now than before social distancing, and 86% of respondents are likely to continue to shop online for groceries when social distancing measures are removed. Business Insider projects that 55% of U.S. consumers will shop for groceries online by the end of 2024.
- Importance of omnichannel strategy – With more customers shopping online, the importance of having a cohesive and consistent brand across online marketplaces and social media is greater than ever.
Snapshot of Top Ecommerce Platforms
The COVID pandemic spurred many retailers to launch ecommerce sites, and more sites are expected to be launched or re-platformed. The ecommerce technology platform market is large and fragmented. There are ecommerce platforms targeted at the micro merchant, such as SquareSpace and Wix, and ecommerce platforms targeted at large multi-national retail enterprises, such as Salesforce Commerce Cloud and Oracle CX Commerce. I have summarized some of the more popular ecommerce platforms for small and mid-sized retail businesses:
Top SMB Focused Ecommerce Platforms
|BigCommerce||-Starting at $29.95/mo.||Online retailers seeking a managed turnkey proprietary platform that can scale with business growth.||
-Hosting, updates, and maintenance included in monthly fees.
-Clear dashboard and design allow sites to be built in minutes.
|-Cost-effective pricing. -Provides multiple built-in features.
-Offers unlimited products, bandwidth, and support.
-Customer support available via phone, email, live chat, or the forum.
|-No free themes
-Recurring billing not available in core platform.
-Annual limit on sales volume with each plan.
-Cost of plugins can become expensive.
|Magento||Free – open source||Larger and multi-site online businesses with dedicated internal IT resources seeking a scalable open-source platform.||-Highly scalable open-source platform.
-Thousands of apps and extensions
-Ability to customize for seamless user experience.
|-No charge to download the software -No transaction fees. -No limit of number of products -More than 100 free themes. -SEO-friendly -Huge development community.||-Customization is free but complicated.
-Complex to deploy
-Most retailers need to hire professional developers.
-Hosting and domain registration separate.
-24/7 support not available.
|OpenCart||Free open source||New online businesses seeking an easy-to-use open-source platform that can be quickly configured.||-Straight forward and simple user interfaces.
-Supported with comprehensive documentation.
|-Large set of features. -Easy learning curve for new users. -Can be used on any server with PHP and MySQL. -The cost-effective overall cost, even for small businesses.||-Not very easy to customize so flexibility for site design is limited.
-Lags in performance and features unless additional plugins are purchased.
-Smaller development community than WooCommerce or Magento.
|Prestashop||Free – open source||Smaller online retailers seeking an open-source alternative to WooCommerce.||-Backed by a large development community developing paid plugins.
-Targeted at new and intermediate online sites.
-Good international capabilities.
|-Large development developing available features.
-Admin panel is flexible and easy to manage.
-Easy to change an old theme to a new one.
|-Modules required for a fully functional shopping cart are expensive.
-Challenging to scale from small to medium-sized businesses.
-Inability to input attributes and cross-sell products.
-Default theme and product catalog need improvement.
|Shopify||Starting at $29/mo.||Smaller online businesses seeking an easy-to-use proprietary paid turnkey ecommerce platform.||-Features include integrated POS, social media integration, blog module, product reports.
-Turnkey product. Do not need to buy hosting and set up services separately.
|-Easy to set up. -Lots of templates, addons and integrations, including POS -Various payment processing options. -24/7 customer support. -online and offline mode.||-Few free store templates (paid themes can cost $200 -Advanced Shopify option costs $299/month. -Surcharge if you do not use Shopify Payments. -Shopify controls your e-commerce store and site’s data. -Charges for additional customizations.|
|Volusion||Starting at $15/mo for 100 products.||Online businesses seeking a proprietary ecommerce platform as an alternative to Shopify.||-Known for strong marketing features.
-Intuitive interface design.
-Plugins curated and tested for compatibility.
|-Social media integration options to help sell and share online. -Native customer loyalty program. -Ability to integrate with Amazon and eBay. –
24/7 support available.
|-Limited design options -Requires some coding knowledge.
-Limited add-ons or plugins relative to other options.
-Low limits on number of products in certain plans.
– Declining market share
|WooCommerce||Free – open source||Online business owners seeking highly customizable free open-source platform with many visual design and functionality addons.||-Very popular e-commerce platform powering almost 30% of e-commerce sites.||-Free plugin to WordPress.
-Easy to use.
-Access to thousands of WordPress themes.
-Unlimited products and product categories.
-Retailer maintains total control over design and data.
-Available plugins to optimize SEO.
|-Need to retain third-party providers for hosting commerce stores, SSL certificate, and domain.
-Set up process not turnkey and involves multiple steps.
-No central management of quality of plugins.