Surging E-commerce Transactions Mean That Making the Right Product is Not Enough, You Also Need to Have the Right Channel

E-commerce sales since 1999 have grown on average by 20-percent annually. Yet in this unusual year, e-commerce sales increased by 32-percent in just the second quarter of 2020 as people changed their purchasing behavior and their demand for certain goods vastly changed. For comparison sake, using its historical growth rate the industry would have needed 1 ¾ years to grow the same amount it did in just these three short months.

Michael Guckes

Former Chief Economist & Director of Analytics, Gardner Intelligence

The pandemic induced recession of 2020 has been profoundly different from those of the past in terms of how it has created distinctly more misery for the services sector and supply chain disruptions especially for manufacturers. These unique aspects of the current recession are well understood and have been extensively covered in the media.

However, there is another very distinct component to this recession which has received far less coverage than it deserves and that is how sales channel usage has changed. E-commerce sales since 1999 have grown on average by 20-percent annually. Yet in this unusual year, e-commerce sales increased by 32-percent in just the second quarter of 2020 as people in mass changed their purchasing behavior and attitudes towards on-line consumption. To put this in perspective, based on its historical growth rate, e-commerce sales would have needed 1 ¾ years to achieve the same sales growth it did in just the March through June period of this year.

E-Commerce sales in the second quarter 2020 grew 32%, that is equivalent to 7-quarters of growth based on the measure’s long-term growth rate. Source: Census Bureau

As producers of manufactured goods, have you considered how the unprecedented behavioral shift in e-commerce sales has potentially raised the bar for your firm’s digital presence? As virtually all of your customers do vastly more of their work -personal personal and business buying- online have you considered how this increases the value and importance of your digital presence? Is your website, digital ad strategy and online purchasing system up to the task of presenting a competitive and compelling brand to them? Although e-commerce has been around for decades, its centrality to business success has been bolstered in 2020 as more professionals do ever more of their work -and buying- on-line and perceive it as the new normal.

Those who succeed and those who fall behind in 2020 will not merely be decided by the result of government regulations -including shutdowns- but also by how they as visionaries are able to incorporate the present economic volatility as part of their business’ strategy moving forward. This reminds me of a quote from Don Gardner, the founder of Gardner Business Media:

Time passes, conditions change, the world progresses – and those who are found keeping pace with the new order of things are those who are young enough in mind and spirit to recognize the value of the new and to make themselves a part of it.

- Don G. Gardner, Founder, Gardner Business Media, June 1928