Study Shows E-Commerce Shopping Patterns That Hint at a New Normal
The need for digital goods and software products has risen since the onset of the COVID-19 pandemic has forced most people to work from home. Around the world, more shoppers and businesses worldwide are now sourcing these items as they try to maximize productivity and increase security from the comfort of their homes. The numbers are mind-blowing.
Earlier this week, 2Checkout published a report indicating that the pandemic is heavily influencing an increase in online shopping as these major events share the same time frame. 2Checkout’s claim is backed by data gathered in March of this year from the firm’s online sales analysis. This data is collated from the activities of over 17,000 sellers of digital and physical products and services.
Another important analysis proves that the spike in the demand for digital and physical products and services began in March. The statistics are as follows: Software-based products — including multimedia tools (40%), partnership (22%), and end-point security solutions (15%). As compared with February, these figures accounted for the growth ramp recorded in March.
In total, 2Checkout projected a 15% surge in the sales of digital goods worldwide and attributed it to the seemingly positive effects of the COVID-19 pandemic. Alternatively, within the same period, there was little to no increase in the trading of physical products globally. According to researchers from 2Checkout, this low demand for physical products can be blamed on the disruption of the channel of supply and logistics as it relates to the delivery of these physical goods and services.
President of 2Checkout, Eric Litch, reports that they “noticed a decline in transactions with offline payment methods involving cash, such as Cash at 7-Eleven in the USA. The weight of this payment method is small — less than 1% of our U.S. transaction volumes. However, we noticed a 30% decline in cash payments, which was expected”.
Researchers at 2CheckOut amassed this data from their genuine sales records and similarly conducted a review of their current and prospective client populace to determine what challenges the firm was handling. This review was also done to show what their coping for the pandemic had become. So far, the result of the review has not been made public.
2CheckOut has a large clientele ranging from enterprise-level corporations like Malwarebytes, HPE Software, myFICO, and Kaspersky Lab, to small and medium-sized businesses (SMBs) and to a long list of micro-companies over 200 countries and regions.
The ensuing figures are a result of a sampling analysis of the buying activity of shoppers in March. In that period, and with the health emergency, customers and companies saw an increased interest in online shopping. With this analysis, Eric Litch presumes to see a recurring surge in online sales across all kinds of digital and physical products and services, short term and long term, more advanced than previously predicted levels done at the onset of the pandemic.
– On March 17, there was an increase in the number of orders in the U.S. Online sales went up by 10% in March compared to February, which had 13% for digital goods. On the digital goods side, orders improved mostly for endpoint security and audio-video/multimedia software. In other groupings, such as monetary products, apart from organic ones, there was no substantial upturn. Services saw a waning decline in online sales by 8% as compared with February, while the sales of physical goods online witnessed a mild increase of 2% over the subsequent months.
– On 2Checkout sales charts, the UK is among the best three marketplaces for most categories. The country witnessed a 14% increase in online sales of digital goods in March compared to February. Online buying of services dropped by 4% while sales of physical goods dropped by 7%.
– Italy remains the first country where order numbers increased radically, as first seen on March 9. Averagely, the sales of digital goods online were over 40% higher in March compared with February. Categories like endpoint security, audio-video software, and web tools saw the most orders. The online sales of physical goods in the country also were on a rising trend. Still, the sales of services online dropped by 21% from February.
– On March 15, the order numbers in Spain increased significantly. Sales for digital goods online went up by 30% in March compared to February. As seen similarly in Italy, online orders increased mainly for endpoint security, utilities, and audio-video software. In categories that housed physical goods, online sales saw a 17% drop while services witnessed an even larger drop at 39%.
– On March 19, order quantities in Germany began to peak. Online sales of digital goods were 15% higher in March compared to February. Orders augmented mainly for audio-video and multimedia software. Germany is a robust market for endpoint security products, customers and businesses are buying these products nonetheless. This makes the effect of the pandemic less substantial in this category. eCommerce sales of physical goods were up by 4% while services declined by 7% in the same timeframe.
– In March, the bulk of online orders for digital goods was only marginally higher than February by 8%, which is small compared to other industrialized countries. However, there was a rising trend in the online sales of services. Both trends were possibly due to the absence of the shelter-in-place mandate. The sales growth remains to be evident for April 2020.
– Australia’s data indicated a minor rise in digital sales. However, there was also a decline in online sales of services, a drop total of 10% in March over the previous month.
The New Normal is Emerging
One of Pund-IT’s principal analysts, Charles King suggests that there will be a growing spike in eCommerce if the COVID-19 pandemic progresses according to projections from a number of epidemiologists. The progression will involve a continuous recession and recurrence until better testing measures are in place, and then subsequently, the cure is found in treatment or vaccines.
King tells the E-Commerce Times that the progression “would provide obvious benefits to established online retailers like Amazon, but it could also create opportunities for mainstream retailers to up their online commerce game and open the door to disruptive new companies.”
Even as the review from 2CheckOut is not reported to have labeled anything as being unpredicted, uncertain, or tricky, there is a need for answers on how supply channels will or can evolve to fit new standards, King noted.
“As many reports have noted, the pandemic has shown some cracks in Amazon’s armor in terms of the speedy delivery promised to Prime shoppers,” he observed. “If the company and its suppliers fail to address that, it would erode or remove one of Amazon’s biggest advantages.”
It’s noteworthy to study how brick-and-mortar merchants will cope if online vendors do not succeed in reviewing their shortcomings in their supply chain, King advised. If this is the case and they fail to find alternative solutions, clients and companies might revert to supporting indigenous retailers.
“If that happens,” he adds, “expect those businesses to develop new services and offerings designed to keep customers coming back for more”.