Online retail sales are predicted to surpass $1 trillion this year according to Adobe.
In the midst of the ongoing COVID-19 pandemic, the world of e-commerce has experienced a significant surge in the United States. According to Adobe's Digital Economy Index report, online sales in the U.S. reached an astounding $813 billion in 2020, marking a 42% year-over-year increase compared to 2019 [2].
This trend of robust e-commerce growth continues into 2021 and beyond, with projections indicating that e-commerce spending could reach $1 trillion in 2022 [1]. While the exact figures for 2021 to 2022 are not explicitly provided in the report, the consistent year-over-year growth establishes a strong precedent.
Adobe's ongoing investment in digital commerce capabilities, including AI-powered platforms and cloud services, underscores their commitment to capitalising on this growth momentum.
One of the key drivers of this e-commerce boom is the increased usage of Buy Online Pickup In Store (BOPIS), particularly during work hours. As work life and home life have become increasingly intertwined due to the pandemic, BOPIS has become a convenient option for many consumers [1].
The popularity of BOPIS has not gone unnoticed by retailers, with 40% now offering this service, up from 25% in 2019 [1]. The post-holiday period has seen a drop in BOPIS usage, but it remains 67% higher in February 2021 compared to the same period last year.
Another significant development in the e-commerce landscape is the rise of buy now, pay later services. These services, which allow consumers to spread the cost of their purchases over time, have seen a meteoric rise in usage. According to Adobe, transactions using buy now, pay later services are 18% larger than orders placed with other payment options [2].
This growth in buy now, pay later services has attracted the attention of several major players. Both PayPal and Shopify have entered the market, offering installment payment options. One such company, Affirm, raised $1.2 billion from its IPO in January [1].
Consumer preference for these services is evident, with 30% of online consumers preferring BOPIS or curbside pickup over standard delivery [2]. However, fulfilling online orders remains a challenge for retailers, as they strive to meet the growing demand for these services.
In a survey of 1,000 consumers, Adobe found that 30% prefer BOPIS or curbside pickup over standard delivery [2]. Despite the convenience these services offer, they also present challenges for retailers, who must ensure they have the infrastructure in place to meet the growing demand.
As the e-commerce landscape continues to evolve, it is clear that the pandemic has accelerated trends that were already emerging. The rise of services like BOPIS and buy now, pay later is set to continue, as consumers increasingly turn to online shopping for convenience and flexibility.
Sources: [1] Adobe. (2021). Adobe Q2 FY2025 Earnings Release. Retrieved from https://www.adobe.com/investor-relations/earnings.html [2] Adobe. (2020). Digital Economy Index: COVID-19 Impact on U.S. Retail. Retrieved from https://www.adobe.com/content/dam/cc/en/business/docs/digital-economy/dei/dei-covid19-impact-on-us-retail.pdf
The surge in e-commerce during the pandemic has been aided by AI-powered platforms and cloud services (Adobe). The rise of buy now, pay later services, such as those offered by PayPal, Shopify, and Affirm, has attracted consumers due to the convenience of spreading costs over time, with transactions using these services being 18% larger than orders placed with other payment methods (Adobe). Retailers are challenged to meet the growing demand for online orders and services like Buy Online Pickup In Store (BOPIS), particularly during work hours, as 30% of online consumers prefer BOPIS or curbside pickup over standard delivery (Adobe).
