E-commerce revenue dropping below 2020 pandemic levels has been a ‘when’ rather than ‘if’ proposition for most, and it seems that ‘when’ is now: May 2021 is the first time we haven’t experienced year-on-year growth.
Switched On data reveals that at this stage, we’re set for about a 7 percent decrease in e-commerce revenue year-on-year for May. Is this a sign of the e-commerce bubble bursting? Well…no. While there may have been a drop from $4.01B to $3.73B from May 2020 to 2021, June is in fact set to grow year-on-year. And looking more closely, we still saw 10 percent month-on-month growth from April to May 2021.
Source: Power Retail Switched ON Trajectory #20 (as at 24 May 2021)
This means that the year-on-year drop in May is not necessarily a reflection of consumer behaviour shifting offline, but more that May 2020 was a disproportionately huge month online. That we have continued to see growth in e-commerce revenue until now speaks to the long-term shift online, even when pandemic restrictions had lifted and in-store shopping was an option open to consumers. In fact, year-on-year, 2021 is set for overall growth, which is remarkable considering the year that was. What retailers and brands need to do now is ensure they are focusing on loyalty and retention.
Looking in real time, we can see that the majority of e-commerce revenue for the month was generated the week beginning 16 May, which is in line with Click Frenzy Mayhem. That means that retailers and brands not participating in sales events are missing out on a massive growth opportunity. This is a pattern we have seen time and time again, with online sales events including Black Friday, Cyber Monday and Click Frenzy continuing to break records.
Source: Power Retail Switched ON Benchmarking data
With Victoria plunged into a snap-lockdown, we will of course see a further boost in online revenue, and may yet see a slight uptick to the end of May, lifting the current projected revenue for the month.
While the pandemic may have pushed Australian shoppers of all demographics online, what we’ve seen is that they are here to stay. If May’s dip is a sign of things to come, then what is to come is a strong and resilient e-commerce sector that is adapting in line with consumer need.
Want to find out real-time e-commerce revenue and find out how you’re tracking compared to the competition? Will we see growth in June? Stay up to date with what’s happening in e-commerce in real time with Power Retail Switched On fortnightly Trajectory Reports. Find out more here.