The COVID-19 pandemic is encouraging a move towards “storelessness” as it has accelerated the uptake of digital commerce, according to Randell Rothenberg, executive chair of the Interactive Advertising Bureau (IAB).
Rothenberg discussed this subject in a keynote session at the trade body’s Brand Disruption 2020 conference, which was held online.
“How much has COVID sped up the transition to a direct-brand economy?” he asked. (For more, read WARC’s in-depth report: How the COVID-19 pandemic has accelerated the shift towards “storelessness”.)
“It collapsed five years into a single year. That is, the transition of physical shopping to digital shopping has been about five times faster in 2020, so far, than in any previous year.”
More than 25,000 brick-and-mortar stores are set to close throughout the US in 2020, Rothenberg continued, with a majority of these outlets being located in shopping malls.
And that statistic is one pointer to an emerging model that is taking shape: “We call this new retail paradigm ‘storelessness’,” Rothenberg said.
As a grounding for this idea, the IAB’s executive chair reported that from April through June 2020, “$1 of every $5 spent in retail came from orders placed in digital stores.”
Rothenberg also cited data from Adobe Analytics, the marketing-intelligence provider, which stated that only two days outside of the holiday season saw online sales top $2 billion in 2019.
By the end of August 2020, however, there had been 130 days that hit that benchmark this year – including each day from May to the close of June.
Figures from the US Department of Commerce also indicate that e-commerce currently accounts for between 23% and 25% of retail sales, versus 16% last year.
“Most categories are now becoming majority-digital: that is, more consumers are now shopping in digital stores that are relying exclusively on physical stores,” said Rothenberg.
Looking forward, research from McKinsey, the consultancy, suggests “virtually every consumer category will experience 15% to 45% growth in permanent online shopping,” he added.
Sourced from WARC