For several years, digital sales have been steadily expanding year over year by 12%–15% and gradually taking more and more of the overall share of retail sales, but that expansion was quickly accelerated this year by the COVID-19 pandemic. Total online spending in May was up 77% over 2019, equivalent to 4–6 years of growth at the previously trending rate—practically overnight.
This rapid and unexpected growth led to bottlenecks, backorders, and warehouse labor shortages for many major online merchants, and mandatory shutdowns and store closures forced many merchants to move away from their traditional sales channels in order to meet their customers on the digital channels where they were shopping.
Be Ready to Pivot
Merchants were uniquely positioned to pivot and adapt to these changes in a way they wouldn’t have been able to if this same crisis had happened 30 years ago. Consumers immediately changed their shopping habits, and merchants quickly adapted with robust digital sales channels. Our own survey data shows that 76.8% of merchants changed their selling strategies in response to the coronavirus pandemic. Anecdotally, at Ware2Go, we’ve seen our mix of shipments shift significantly from about a 45%/55% commercial-to-residential ratio to about 15%/85% since the onset of the pandemic.
This trend isn’t showing signs of slowing down any time soon. Even as brick-and-mortar stores reopened, consumers continued opting for digital channels and having a wide variety of items shipped right to their door. Consumers have become more adventurous with their online purchases, driving up online sales of perishable goods and regular household items and have even tried out new brands. Our consumer survey data showed that since March, 55% of consumers made an online purchase from a business they had previously never done business with before. This exposure to new customers is an excellent opportunity for businesses to expand their consumer base but only if they can meet consumer expectations for a digital purchasing experience.
The digital customer experience doesn’t end at checkout—those expectations need to be met with delivery speed, customer service and easy returns. In fact, the delivery experience is driving customer satisfaction and brand preference. For example, 66% of merchants we surveyed reported higher cart conversion rates when fast shipping options were offered, showing clear consumer expectations for speed of delivery. And what’s more, a negative delivery experience can turn customers away forever, with 84% of online shoppers reporting that they would not return to a brand after one subpar delivery experience.