A silver lining of the COVID-19 pandemic has been the rapid rise of e-commerce, relieving shoppers of potential exposure in-store, making it easier for them to compare prices and often extending access to product assortment. E-commerce has its share of challenges in terms of shopper satisfaction, lost impulse sales and increased cost to serve, but retailers, manufacturers and fulfillment partners have opportunities to erase fulfilment friction and create new meaningful ways for shoppers to buy and connect with brands and retailers.

The Rapid Rise of E-Commerce

  • Driven by concerns over in-store safety, American shoppers during the COVID-19 pandemic shifted ~2.5% of edible and ~7.0% of nonedible CPG spend to grocery e-commerce.
  • Crowd-sourcing model Instacart and large, invested retailers Amazon, Walmart, Target, Costco, Kroger, Ahold Delhaize and Albertsons have captured increased demand and are accelerating investments in better shopping experiences, further consolidating the online landscape to large, national players. 

Looking Ahead

  • Conversion to e-commerce will continue to rise into 2021 and beyond as infrastructure investments catch up with heightened demand amid the new normal.
  • The rapid change in the omnichannel environment will require manufacturers and retailers to quickly assess changes in purchasing behaviour across in-store and online and adapt distribution, assortment, marketing, pricing, promotion and logistics accordingly.
  • Careful consideration of key word search should support shoppers, promote beneficial attributes and spark product discovery.

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