Statista expects over 2 billion people worldwide to buy products online in 2021. By 2023 almost a quarter (22 per cent) of all retail sales will be online. So, what does this mean for small business owners?
Consumer confidence in eCommerce surges
Fuelled by the pandemic, the push to online sales was unrelenting in 2020. Lockdowns and restrictions saw a seismic shift in consumer behaviour with billions of people trying online shopping for the very first time.
Research by Wunderman Thompson Commerce found 43 per cent of shoppers now feel more positive about shopping online. At the same time, 40 per cent of consumers report that they’re more comfortable with digital technology than before lockdown. This increased confidence has seen Statista predict that global worldwide sales revenue will hit $6.54 trillion by 2023.
The future of retail is online
McKinsey & Co.’s ‘Adapting to the Next Normal’ report predicts that our coronavirus-induced online shopping habits will likely be permanent. This structural shift away from traditional shopping habits makes eCommerce an imperative for Australia’s small business owners. McKinsey suggests that as sales shift online, Australia’s retail industry’s employment profile will change permanently. Fewer customer assistants will be required to deliver each dollar of revenue.
Fast forward 20 years and Nasdaq research suggests that by 2040, 95 per cent of retail purchases are likely to be made online, and traditional retail may hardly exist.
A world of discovery
The pandemic has also fuelled a quest for new products and services, which is excellent news for small business. According to Arlington Research, almost five in ten consumers (46 per cent) tried new brands during the pandemic. Shopper behaviour differed by generation, with millennials most likely to try new brands. Seventy-five per cent of millennials bought goods online during the pandemic that they had not considered prior. At the same time, Contact Pigeon reports the average items per order increased by 60 per cent during COVID-19.
Buyer demographics are changing
Gone are the days where online shopping was the domain of the younger generations. Online customers now represent the majority of age groups. Sure, those aged 25-34 have the highest penetration (Statistica) in the market. Still, other age groups have also embraced the eCommerce trend. Case in point: UK retailer Waitrose found that regular online shoppers over 55 tripled in 2020. In comparison, the second-largest group of digital buyers was those aged between 35-44. Statista reports five per cent of US consumers aged 65 years and older also bought a product online for the first time in 2020.
Australian-made comes into focus
Australians have thrown their support behind local online businesses during 2020. Vend reports Victorians spent over $62 million with local business in November alone. Meanwhile, in December MYOB reported that 39 per cent of consumers preferred Australian brands with six in ten prepared to pay more for an Australian product. Tapping into the trend, Amazon’s Shop Local Store placed Aussie small businesses front and centre ahead of the massive shopping event Prime Day, giving local brands from Launchpad the opportunity to be seen by millions of keen Amazon shoppers.
Cross-border purchases are booming
According to Digital eCommerce 360, international eCommerce purchases are booming. Cross-border sales increased by 21 per cent during the first half of 2020 with consumer interest in overseas retailers predicted to continue to grow.
A survey by Global Web Index of 17,143 internet users conducted in May across 20 countries found that 46 per cent of shoppers plan to shop online more frequently after the pandemic subsides. Meanwhile, Statistica reports that over a third of US shoppers (34 per cent) have purchased from vendors outside the US, highlighting the opportunity for savvy Aussie brands to capitalise on this eCommerce trend.
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