In the fall of 2020, nearly every commerce analyst reported that the Covid-19 pandemic accelerated e-commerce adoption by an average of five years. With 2020 in the rearview mirror and his new consumer behavior two years later, was The Great Acceleration true and what does this mean for organizations today? Is not it?
Let’s start by defining what analysts mean by ecommerce adoption. Ecommerce adoption is largely quantified by the percentage of dollars that move through digital rather than physical stores. At the height of the pandemic, e-commerce accounted for approximately 16.6% of total retail sales, a significant increase of approximately 5% from Q1 2020. This change marks the acceleration of e-commerce adoption for at least five years. Many experts predict a permanent digital economy.
In early 2021, as lockdowns eased more and vaccines began to become available, offline spending returned to pre-pandemic levels and footfall increased at an alarming rate. Fast forward to today, U.S. Department of Commerce reports that e-commerce sales account for 14.3% of total retail sales.
The biggest impact of the pandemic on the digital economy has not been the acceleration of e-commerce adoption. This could have happened with or without the introduction of e-commerce, but it highlights how quickly a dramatic shift in consumer behavior can occur. This has increased the need for organizations to have a strong digital strategy that can adapt and thrive in any economic environment.
Complex consumers post-pandemic
Post-pandemic consumers will be digitally different from their pre-pandemic selves. Lockdowns and stay-at-home orders have forced consumers to just one method of engagement: digital. Consumers of all generations are becoming more tech-savvy, and as a result, their buying behavior is becoming increasingly decentralized. harvard business review reports that an overwhelming 73% of consumers use multiple channels to find and buy products.
As digital-savvy consumers began to engage in new, decentralized ways, organizations began expanding into new channels to keep up with the complex and evolving consumer behavior. Diginomika says69% of digital leaders have reported investing in new digital channels in the past two years, and 58% expect to continue expanding into new channels within the next two years.
Additionally, organizations needed to introduce new technology into their existing channels to keep up with new consumer buying behaviors. For retailers and grocers, this meant rapidly adding online purchases, in-store pickup (BOPIS), curbside pickup (click and collect), and new fulfillment and last-mile delivery services. A great example of this can be seen in a recent Shake Shack client story.
The need for companies to advance through digital transformation is heightened as a result of efforts to expand into new channels while digitizing consumer and supply chain interactions and internal operations.
Move your organization forward through digital transformation
As a result of the pandemic, organizational leaders have been challenged to define and execute powerful digital transformation plans that are very different than they were before. Before the pandemic, most digital strategies worked in annual cycles. Today, the quarter is he year, and your digital strategy must be both agile and resilient.
The gradual change in Q2 2020 was driven by consumer needs, not consumer wants. Organizations have benefited greatly from digital growth without focusing on innovation in key areas to sustain e-commerce adoption over the long term. Imagine if the organization had rolled out a new, agile digital strategy in the three months before the pandemic and every quarter thereafter, growth rates in e-commerce adoption would never have returned to pre-pandemic levels. I can do it.
Some companies have invested heavily in innovation, but recent research by McKinsey shows that they got far less value than expected. why?
The main reason is a strategy focused on cost efficiency rather than using digital technology to strategically engage with customers. Instead of seizing this opportunity to accommodate new levels of digital sophistication to drive consumer desires, organizations that have optimized their costs with the increasing adoption of e-commerce will be forced to steadily continued to be promoted.
While the pandemic did not accelerate e-commerce adoption five years ago, it has revealed a new digital mentality for consumers and organizations. This will impact how we engage with commerce for years to come.. Taking advantage of this time to move forward through organizational innovation to develop digital experiences will drive consumer desire. , thus earning the right to succeed.
