“We have two products on the current market,” stated Peter Sheldon, senior manager of trade strategy at Adobe. “We have got Magento Commerce and Adobe Analytics. Between the install base of these two, we gather a massive quantity of aggregated data around online behaviours, online retail spend, etc.
Alright, see our products:
“And each month we publish what we call our’Adobe Digital Economy Index.’ This is our finger on the pulse of what happens with online revenue, and it’s been very interesting since March versus our predictions. We’re always quite accurate on our predictions. Coming into 2020, we knew exactly what was going to happen under normal conditions. But what we’ve seen so far since March [is that] online spend in the U.S. has led to an additional $107 billion.”
A Time Machine
Many industry insiders see the volatile ecommerce expansion as something of a time machine transporting the sector to a future date concerning technology and business practices.
“If we ask,’What’s Covid done over the past 12 months?’ — it’s put us in a time machine. Meaning, it’s accelerated [ecommerce]. The forecasted growth we had for the change of retail spend from brick-and-mortar to digital was going to happen anyhow. But two-to-three decades of forecasted online station change and increased spending online was efficiently compacted into six months,” said Sheldon. “We have just moved ahead the inevitable. This was always likely to happen; it has just happened way, way quicker.”
The speed of the transition has impacted the whole ecommerce industry.
“Call it a slow hunch,” said Brian Walker, chief strategy officer at Bloomreach, who talked in early August 2020. “I think many people anticipated that digital trade — the electronic experience — was likely to continue to increase in importance, and it surely has. But since Covid started, it moved from significant to urgent for many businesses.”
Not every company or industry segment was prepared to make these types of changes.
At-risk businesses, if you will, had structural or financial challenges before the pandemic started. These challenges made it somewhat harder for them to pivot, enlarge their ecommerce operations, or take on new software projects.
Some of these retailers will emerge from bankruptcy. J.C. Penney, for example, has been bought by its landlords, mall operators Simon Property Group and Brookfield Property Group. Other businesses won’t survive. Lord & Taylor was in complete liquidation mode at the time of writing.
Lord & Taylor is one of several businesses that will close due to Covid-driven marketplace pressures.
The issue, in part, is investment. “Time travel” to three years in the future meant that companies must spend digital-transition funds in only one summer that could have taken 36 months.
A merchant that had planned to construct click-and-collect capabilities over a few years needed to execute, rather, in a couple weeks.
Those companies which were able to invest tended to get a competitive advantage.
Walmart, which profited from the kinds of goods it carries and its powerful infrastructure, enjoyed a 97-percent growth in ecommerce sales during the fiscal quarter ended June 30, 2020. And, on September 23, the company announced that it would hire 20,000 seasonal employees to assist with holiday sales.
Likewise Target, which has fewer overall sales than Walmart, saw a 200-percent growth in ecommerce sales in the second quarter and plans to employ about 130,000 temporary employees for the holidays.
Smaller businesses which were able to invest could have observed similar results.
When they make substantial improvements in such a brief period, already powerful B2B brands and retailers raise the bar for everybody.
By way of instance, a new online merchant must compete not only with enterprise ecommerce vendors, but also with newly aggressive in-store merchants offering click-and-collect, curbside pickup, and home deliveries through Uber or DoorDash. Therefore, the pandemic-driven”time machine” might elevate the whole ecommerce industry.
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