“Freight Freak” John B: Ecommerce Outlook in 2021
Posted by AMS / Tuesday, March 16, 2021
I wrote about Ecom retail shopping back in January of this year. Linked HERE.
I stated in that blog a fact that had become very clear: Companies that were prepared for new marketing techniques, specifically within the e-commerce channel, and those able to adapt to the new buzz word, “digital transformation”, learned that making this previous investment into e-commerce kept their businesses alive. (“Digital transformation” defined as companies making their relevant offers and services consistent with a focus on customer experience, with e-commerce being the main element in keeping the business thriving.) I said when this all started that my personal belief is that e-commerce will remain the center of the retail experience going forward. This pandemic was the catalyst that took it from greater than $546.6B just in the first three quarters up 32.6% YOY annual sales, still rising in the range of 25-30%, as Bricks and Mortar fall by approximately 15%. This is according to the stats from digitalcommerce360.
Well, this apparently got quite a bit of attention not only from clients but other e-commerce bloggers and industry experts. Ella Miller, an editor from Leeline Sourcing, wrote to me saying that they thought my article was good but perhaps I should add more meat to the bones. They offered an article that does just that and allowed a link to it as well if readers are interested in a deeper dive to the Ecommmerce 2021 Stats. Linked HERE.
Here are some of the highlights:
• Which countries are leading in e-commerce?
• What’s the market share of e-commerce in the economy as a whole?
• Which platforms should you use? Which are the largest?
I’ll paraphrase from the article:
As I have previously written, with the impact of Covid-19, the international network of consulting firms, Deloitte, reports similar findings – “The pandemic is rapidly changing our behavior toward online channels.” This is what we call Digital Transformation. The firm adds that this is a shift “likely to stick post pandemic.” Good news for those running any kind of e-commerce business.
The Leeline Sourcing article states that a business that may be considered an e-commerce firm in one set of statistics may not be included in another. Therefore, they present the numbers not as absolute figures but as an indication of the direction in which e-commerce is moving. Those estimates indicate that there are between 12 million and 24 million e-commerce sites in the world. That’s a big spread but the article goes on to explain, “It can be challenging to say what an e-commerce site exactly is or perhaps a threshold providing an idea of the revenue a website should make before it calls itself an e-commerce site.” PipeCandy.com estimates that there are between 2 million and 3 million e-commerce companies in the world.
No matter what the actual e-commerce total businesses are, according to Statista, the number of people buying goods and services online in 2021 will be over 2 billion. It is expected that these numbers will lure more companies into the e-commerce sector. Therefore, it can be expected that the number of companies selling goods online will increase to meet this growing demand. With 7.8 billon people living in the world today, and Statista’s estimates of over 2 billion buying online, we are looking at about a quarter of the population buying online this year.
Orbelo.com, a learning material provider in the e-commerce area, says the leading reason for online shopping is because it provides free delivery. Other people like that goods can be returned easily, while others say they take advantage of other buyers’ reviews. I think we will soon see the free shipping get less and less as freight continues to rise. The duopoply, FedEx and UPS, raise rates and surcharges each year by an average of 5%, thus last year it was even more as many unprecedented Peak and Covid Surcharges were added. What’s even more interesting to me is who is buying online. The digital distributor of business press releases, CMSWire.com, quotes Statista, which reports that “The largest group of digital buyers in the US were millennials aged 25 to 34 years in 2020. The second-largest group was 35- to 44-year-olds.”
Another interesting statistic from the article talks about the top ten largest e-commerce markets ranking 1.China, 2.US, 3.UK, 4.Japan and 5.Germany among the top five. One could almost guess this ranking with the US taking the second position among the major e-commerce markets in the world. The leading US companies driving e-commerce sales include eBay and Amazon. China, the leader right now in the e-commerce global market, is responsible for 50% of the global online transactions. Other fast-growing sectors include Latin America. Acording to eMarketer.com, Latin America’s retail e-commerce sales grew 36.7% in 2020. It also says that nearly $85 billion exchanged hands in e-commerce sales in the region. They put this into perspective looking at the growth in retail sales in the period before the pandemic took hold. In the last quarter of 2019, e-commerce sales were expected to grow 12.5%, and 19.4% in the first half of 2020.
All of this of course requires platforms that enable merchants to sell online. Shopify seems to be one that is most used across the US but also is in 175 countries with one million companies. They are pretty much dwarfed by WooCommerce which is used by 4.4 million.
AMS is one of the 3PF industry innovators taking steps to support this amazing growth and can pretty much integrate with any software platform. Equipped with bi-coastal locations totaling over 1M square feet across eight facilities, AMS has shipped to 194 of the world’s countries and every continent except Antarctica. We have all modes of transportation and logistics support to provide the least possible cost of delivery. We are available to help make your e-commerce business thrive with our suite of services. I want to thank Ella with Leeline Sourcing for contacting me and for the content included in this blog. I highly recommend that you refer to this link to read the article in its entirety: https://leelinesourcing.com/ecommerce-statistics/
Let us know how we can help improve your supply chain.
JB/ Freight Freak
About the Freight Freak:
John Bevacqua is the VP of Logistics at AMS Fulfillment. His area of excellence is in creating distribution and fulfillment operations that function as a capable interface between suppliers, retailers, and wholesale distributors. His experience includes developing and leading FedEx/ Kinko’s Distribution Services into the FedEx post acquisition, USA Wireless Technologies, and a top Logistics Management company. He has also worked with third party fulfillment companies, preparing him for his current position with AMS Fulfillment.