Last month we forecast 38 percent year-on-year growth for March e-commerce revenue, aligning with the latest ABS figures. Is this cause for panic or celebration?
Back in mid-April, Power Retail Switched On released its Trajectory Report which forecast that year-on-year e-commerce revenue growth for March 2021 would be 38 percent. Yesterday, the ABS released its latest figures, showing that March online revenue grew by….38 percent year-on-year.
The Power Retail E-Commerce Revenue Estimate combines data from all sources available (including aggregated analytics feeds and externally sourced data, drawing from over 10 million sessions per month) to create an estimate of total e-commerce consumer spend in Australia. Forecasting is based on previous years as well as trends and is adjusted based on current consumer confidence. Taking a holistic view of consumer spend, Power Retail numbers include elements that aren’t included in ABS data (such as businesses not based in Australia and some consumer to consumer spend).
It’s a reflection of just how far e-commerce has grown in the last year that 38 percent growth has put many online retailers on edge. We always knew that replicating the growth of 2020 was impossible, and the question on every retailer’s mind is whether this kind of growth can continue as 2021 progresses.
That there was still incremental growth on top of the seismic growth of 2020 is actually pretty remarkable. The figures show that consumers are not abandoning online now that stores are open, but that the pandemic-related push to online has changed consumer behaviour. Shoppers are online because they want to be, not because they have to be.
While younger shoppers have long been comfortable in the digital space, lockdowns and restrictions introduced a completely new demographic to the convenience of shopping online. In fact, the majority (51 percent) of shoppers aged 40 – 65+ report that they are even more comfortable shopping online now than ever before. This means that retailers need to ensure that their current strategies for growth include consumers who may not have been part of their target market 12 months ago.
We’ve previously flagged that 2021 is the year of retention (to the point that it’s now become our catchcry) and the revenue growth we’ve seen so far shows exactly why. An unprecedented global event may have caused exponential growth online, but this is no longer just reactive spend. How are we keeping shoppers online?
If anything, it’s time to double down on a digital strategy and ensure investments made over the last year come to fruition in the long term. The New Normal: Are we there yet?
Will growth slow to the point of slipping to below pandemic levels? Want to know the April e-commerce revenue growth figures? 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.