And it's very likely that these behaviors will continue, even when the coronavirus pandemic eventually subsides. Why? Because ecommerce habits tend to form during periods of intense activity, and when those habits already have momentum, they become even stickier.
For years, ecommerce has exhibited a clear step function coming out of the holiday season. Spending was broadly consistent in the first three quarters of the year, then saw a predictable surge in Q4. But coming out of Q4, ecommerce spending patterns never fell back to where they were before. Instead, they locked in most of the Q4 gains and set a new, higher baseline for the following year.
The reason for this was that with each new cycle, consumers were adapting and growing more sophisticated in their online buying patterns amid the holiday crunch. What started as simply making a purchase eventually progressed to buying in new categories, purchasing high-ticket items, and shopping and buying via mobile. Every time these behaviors crystallized for a new set of consumers, it permanently shifted their online buying habits.
Grocery ecommerce is now having a similar moment. Millions of first-time online grocery buyers are materializing, and millions of infrequent buyers are now doing so on a weekly basis, vs. over multiple weeks or months.
Of course, these shoppers will eventually return to stores. But if households that had previously used ecommerce for just one out of every 10 grocery trips were to permanently shift to one out of every five, the long-term impact would be profound.
When looking at total US retail sales, food and beverage is a $1 trillion category. If the ecommerce category penetration went from 3.2% to 5.2% over the next couple of years, that’s about $20 billion moving online. And if those dollars flow away from national and regional grocery chains and into Amazon’s coffers, it will be a massive top-line haircut on a notoriously thin-margin business.
Despite grocery retailers being the most immunized retail sector from the coronavirus in the short term, their own crisis is inching closer each day. Will they act before it’s too late?
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April 05, 2020 at 11:26AM
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The Coronavirus Will Cause a Lasting Step Change in Grocery Ecommerce - eMarketer
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