GroupM forecasts trillions of dollars of e-commerce growth in next few years
E-commerce has become an integral part of the “new normal” since the coronavirus pandemic began this year, and the behemoth that is online shopping is only expected to grow by the trillions throughout the 2020s, the inaugural e-commerce forecast from GroupM predicts.
With many brick-and-mortar retailers beefing up their online presence due to COVID-19 operating restrictions, coupled with most consumer packaged goods manufacturers experiencing a shift in how their products are purchased, global e-commerce enjoyed a record-breaking year.
In the second quarter of 2020 alone, retail sales via e-commerce channels recorded a 277% explosion in growth, GroupM’s proprietary data found—and that popularity is not expected to wane in the future, even as the pandemic is brought under control.
The media investment company further estimates that global retail e-commerce, excluding food and delivery services, will work out to $3.9 trillion in 2020, or 17% of equivalent global retail sales—more than double its annual sales activity in 2016.
“There’s a huge opportunity in e-commerce for brand building, tying clients’ online operations to their media activations across channels,” says GroupM’s global CEO Christian Juhl. Since March 2020, when the coronavirus situation first became serious in the U.S., the brand-building value and necessity of e-commerce has been clearly demonstrated to clients, he adds.
“Since e-commerce strategy’s impact on brand-building leads to stronger immediate performance, brands should have a particular interest in focusing on this space now and for the foreseeable future.”
For those that do embrace the online powerhouse, the future will be bright. By 2024, e-commerce will account for $7 trillion in annual revenue, equaling 25% of the world’s retail sales at that time, GroupM predicts; just three years later, assuming e-commerce continues its steady annual growth, that figure is poised to reach the $10 trillion mark.
However, not all global economies stack up equally in the e-commerce boom. In some highly developed nations, including Canada, Australia and Japan—all of which implemented fairly successful coronavirus response plans—e-commerce’s share of total retail activity in 2020 was in the single digits. On the other end of the spectrum, China, which is the world’s single largest e-commerce market, recorded sales equivalent to 25% of all retail activity this year.
The U.S. falls somewhere in the middle, though it is not exempt from the online retail boom; next year, e-commerce will be equivalent to 16.2% of all domestic retail sales, the company projects.
Marketers will need to pay attention to the increasing importance of omnichannel strategies in the coming decade, GroupM says, as online shopping continues to proliferate more retail categories, leaving retailers to re-evaluate strategies, including store layout, retail management and customer service, on an ongoing basis.