Rising Tide in Online Retail Lifts All eCommerce Boats
eCommerce was on a strong-but-slowing growth trajectory prior to the global spread of COVID-19. Stuck inside, Consumers have turned en masse to online retail with physical retail options are now all but shuttered. It is estimated that the wide-spread shutdowns beginning in early March have accelerated the already-robust growth of eCommerce by up to 5 years. Growth in eCommerce sales just between the March shutdowns and the end of April 2020 was a whopping 49%. This rapid expansion of the online retail space has translated into a surge in growth for eCommerce platforms like Magento and Shopify, who are looking to capitalize on the recent Amazon pushback from brands big and small.
The retail giants are experiencing “holiday-like” volume in their eCommerce operations as consumers redirect their spending to online platforms. Preliminary data from the early months of 2020 show an unprecedented spike in eCommerce sales for the retail giants. Walmart and Amazon saw an influx of spending in their online retail segments with Walmart reporting 74% quarterly growth in eCommerce sales and Amazon reporting 26% net sales Growth for Q1. Luxury eCommerce player Farfetch reported 90% YoY revenue growth for Q1 and eCommerce furniture & home-goods platform Wayfair experienced a similar surge with 90% YoY growth in sales for Q2.
In October of 2019, Shopify CEO Tobi Lutke stated that his company’s goal was to “arm the rebels” against the Amazon.com empire. While they were already seizing market share from Bezos, the self-proclaimed Anti-Amazon has seen groundswell in business following international lockdowns and physical store closures. As of April 2020, Shopify has seen a 47% increase in YoY Revenue and a 46% increase in YoY Gross merchandise. We can only assume that Shopify will continue its upward journey as online retail becomes a more permanent part of the average shopping experience.
Another enablement provider, Salesforce Commerce Cloud, has experienced a 30% YoY increase in subscription revenue in April 2020. In a move to capitalize on the recent surge in eCommerce demand that may be straining many existing eCommerce operations, Salesforce has recently rolled out four new service packages as part of its cloud solutions software offering to specifically help businesses quickly and efficiently adopt to the new demands that have come with the COVID environment.
The temporary COVID-related shutdowns may have spurred the recent rapid growth in the eCommerce space over the past 10-12 weeks, however, expansion in the space is likely to carry on after the dust settles. As consumer behavior begins adapt to the new normal, online retail is poised continue its growth and eCommerce enablement will ride its wave to the top.