Report: U.S. E-commerce Will Rise 18% in 2020 Due to Pandemic

The COVID-19 pandemic is fueling online sales, according to new data from eMarketer.

The research firm predicts a 10.5% decline in total U.S. retail sales this year, with a 14% drop in brick-and-mortar sales. In February, the research firm projected growth of 2.8% to $5.6 trillion in total domestic retail sales.

The one bright spot: E-commerce is set to grow 18% this year following a 14.9% uptick in 2019.

“E-commerce sales have been driven by a surge in click-and-collect, specifically curbside pickup, allowing U.S. consumers to make immediate purchases while minimizing human contact,” Alexandra Samet with eMarketer wrote in a post. “We now expect U.S. click-and-collect e-commerce sales to grow to $58.52 billion, up 60.4% from our initial forecast of 38.6% growth.”

Samet said the 18% growth forecast for e-commerce reflects a notable increase in both the number of digital buyers and the average spending per buyer. She said the gains reflect the pandemic’s impact on new buyers joining the online retail space, including 12.2% growth for those ages 65 and older.

“In a pandemic economy, consumers have gravitated toward trusted and reliable retailers,” Samet wrote. “As a result, we can expect the top 10 e-commerce retail businesses [i.e. Amazon, Walmart] to grow at above average rates (21.8%).

Some of the extreme channel-shifting in Q2 2020 will subside over the course of the year as stores reopen and lockdowns end countrywide, according to eMarketer. However, certain behaviors like click-and-collect and curbside pickup will persist, indicating a long-term trajectory of e-commerce growth.

“Walmart’s accelerating e-commerce growth will take it to the No. 2 position for the first time,” Samet wrote.

eMarketer: 5 Million New Online Shoppers Due to COVID-19

Throughout the coronavirus pandemic, e-commerce has seen an uptick as traditional retail shuttered or reduced normal operations to help curb the spread of the virus.

New data from eMarketer estimates that more than 204 million people ages 14 and older will make an online purchase in 2020 — two-thirds of which will be 45 and older. The updated forecast, which factors in the pandemic’s effects, anticipates a 5.8% increase in the number of digital buyers 45 and older, up from 3.2%. This equates to nearly 5 million new users.

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In separate surveys conducted Feb. 28 and March 17, baby boomers said they had shifted their shopping to online in the three-week span. In the March poll, roughly 23% of boomers said they had been shopping more online due to the pandemic, considerably more than the 8% of respondents in February.

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In a separate Salesforce survey during the first two weeks of May, 28% of baby boomers said they had used contactless delivery more than usual, followed by self-checkout options (23%) and click-and-collect (23%).

And an April 2020 GlobalWebIndex study found that 31% of U.S. Internet users ages 16 to 64 said they will shop online more frequently after the pandemic ends, and 30% expect to visit stores less frequently.

“While we expect some shopping habits to return to normal post-pandemic, it’s likely that consumers who have tried online shopping for the first time will stick with it, at least for occasional purchases,” Cindy Liu, author of the report, wrote in an online post.

Walmart U.S. E-Commerce Sales Expected to Rise More Than 44% in 2020

Walmart’s U.S. e-commerce sales are expected to jump 44.2% in 2020 versus 2019, according to a report from eMarketer, which revised growth up from its January 2020 estimate of 27%.

The leap follows 36.8% growth in 2019 over 2018 and puts Walmart at No. 2 on eMarketer’s top 10 e-commerce companies list, far behind Amazon, but well ahead of eBay, which is expected to grow just 3% in 2020.

“Thanks to Walmart’s prior investments in online grocery delivery and pickup services, the retailer appears to be in a strong position as consumers have increasingly turned to e-commerce amid the pandemic,” according the eMarketer’s Cindy Lui.

eMarketer forecasts that the big-box retailer will grow its share of total U.S. retail e-commerce sales to 5.8% this year, up from 4.7% in 2019.

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For the fiscal first quarter ended May 1, Walmart reported U. S. e-commerce sales grew 74%.

Target Q1 E-Commerce Sales Up 141%, Profit Plummets

Big-box retailer and home entertainment distributor Target May 20 reported a 141% increase in e-commerce revenue for the first quarter (ended March 31), as consumers stocked up on lower-margin products online due to the coronavirus. As the same time, higher-margin apparel and merchandise sales declined, which contributed to a 0.9% increase in same-store sales.

CEO Brian Cornell said Target.com saw an increase of 5 million customers in the quarter, while more than 2 million used the drive-up service. The chain said more than 70 million people have downloaded the Target Circle app to access e-commerce.

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Overall retail sales increased 11.3% to more than $19.3 billion, from $17.4 billion during the previous-year period. Yet, net income plunged more than 64% to $284 million, from $795 million a year ago. The culprit: increased product, employee and shipping costs for online sales.

Target said cost-of-sales increased more than 18% to $14.5 billion, from $12.2 billion in the previous-year period. Administrative costs increased 10.9% to $4 billion, from $3.6 billion a year ago.

The decreases reflected actions taken by Target’s merchandising teams, including costs and inventory impairments related to the rapid slowdown in apparel & accessories sales, unfavorable category mix as consumers stocked up on lower-margin categories like essentials and food and beverage resulting in higher digital and supply chain costs, driven by unusually strong digital volume as well as investments in team member wages and benefits.

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Indeed, Target is paying store employees and extra $2 per hour through July 4.

“We’ll continue to be focused on [consumer/employee] safety, not just for the next few quarters, but for years and years to come,” Cornell said on the fiscal call. “We’ve been talking for years about being America’s easiest place to shop. We’re going to need to make sure we combine being an easy place to shop with America’s safest place to shop and make sure that that commitment to safety is ongoing.”

Rakuten TV Launches FC Barcelona Soccer Series

To soccer fans worldwide, Spain’s FC Barcelona (“Barça”) is one of the top professional clubs in the world led by Argentine’s Lionel Messi.

Rakuten TV Nov. 29 launched “Matchday: Inside FC Barcelona,” a free eight-episode reality-based program that follows the club and its players through the 2018-19 season.

Narrated by John Malkovich, the series claims to offer a “no-holds-barred” view of the club and players during a season that saw the club finish atop Spain’s La Liga as well feature prominently in the ongoing UEFA Champions League competition.

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Rakuten is a primary commercial sponsor of FC Barcelona. The series is available for free across the 42 European countries, including Japan.

Rakuten TV is a European-based VOD offering transactional access to new release movies and TV shows. It also includes an AVOD section, Rakuten TV Free, in a blend of thematic channels embracing Hollywood classics, local, exclusive and themed content.

Rakuten, headquartered in Japan, offers ecommerce in the United States. In addition to FC Barcelona, the company has partnerships with the NBA, the Golden State Warriors, Davis Cup and Spartan Race.

Best Buy Eyeing $50 Billion in Revenue, $1 Billion in Cost Cuts By 2025

Best Buy is projecting strength and growth heading into an investor event Sept. 25 in New York.

The consumer electronics retail giant’s “Building the New Blue: Chapter Two” under new CEO Corie Barry includes revised financial targets through 2025.

The company plans to trim $1 billion in costs over the period, while boosting revenue to $50 billion, up from 2020 guidance of $43.1 billion to $43.6 billion.

Heady goals in a retail environment under constant siege from ecommerce giants such as Amazon and Walmart, among others.

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Indeed, Best Buy last month revised downward fiscal-year revenue estimates — largely due to ongoing tariff concerns with China.

The company, like most CE retailers and manufacturers, relies in large part on Chinese-made products, including its line of Insignia TVs.

Second-quarter entertainment same-store sales dropped 13.7% compared to a 8.5% increase a year ago. The business unit includes DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software.

Domestic entertainment revenue topped $441 million, down from $608 million during the previous-year period. The segment represented 5% of Best Buy’s domestic revenue compared to 7% last year. Best Buy closed 13 large format stores in the period.

Regardless, CFO Matt Bilunas remains optimistic.

“In this next chapter, our focus continues to be top-line growth,” Bilunas said in a statement. “We also believe the initiatives we will outline today … along with continued focus on cost reductions, will result in operating income rate expansion over the five-year time frame.”

Amazon Ups Q2 Prime Subscription Revenue 37%, Online Media Sales 14%

Amazon July 25 said it increased second-quarter (ended June 30) Prime subscription revenue 37% to $4.67 billion from $3.4 billion during the previous-year period.

Subscription revenue includes annual and monthly fees associated with Prime memberships, as well as audiobook, digital movies, e-book, digital music, and other non-AWS subscription services.

The Prime membership also includes free access to Amazon Prime Video streaming service.

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Online store sales increased 14% to $31 billion from $27.1 billion last year.

Online stores revenue includes product sales and digital media content available in both a physical (DVD and Blu-ray Disc) and digital format, such as books, music, videos, games, and software sold on a transactional basis.

In the quarter Amazon Prime Video received 47 Emmy nominations for its original programming, more than double from last year, including 20 nominations for “The Marvelous Mrs. Maisel” and 11 nominations for “Fleabag.”

Prime Video premiered the Jonas Brothers documentary Chasing Happiness, and original series, “Good Omens,” based on the novel by Neil Gaiman.

In addition, Prime Video is set to debut original series “The Boys,” from creators Evan Goldberg and Seth Rogen on July 26, and “Carnival Row,” starring Orlando Bloom and Cara Delevingne, among others, on Aug. 30.

 

Rakuten TV Gets Direct-Access on Samsung, LG, Philips and Hisense TV Remotes

Rakuten TV March 14 announced partnerships with Samsung Electronics, LG, Philips and Hisense to introduce a remote control button on their smart TV units in Europe and Pan America directly linking to the streaming video service.

The move comes about eight years after Netflix began incorporating its logo/button on TV remote controls in the United States. The SVOD pioneer followed up in Europe in 2015.

Barcelona-based Rakuten TV, which offers digital retail, rental of Hollywood movies, in addition to subscription streaming video throughout Europe, said incorporating its logo/button on TV remotes would increase its presence worldwide, including reaching more than 30 Million households and tripling its distribution from 12 to 40 countries in 2019.

The platform, which is owned by Japanese ecommerce giant Rakuten, was previously known as Wuaki.tv. A year ago, Rakuten acquired British-based TalkTalk TV, which was previously known as Blinkbox.

The service said it would also increase selection of 4K HDR movies in all the 40 European countries involved in the expansion. Last year it became the first in Europe to offer 4K UHD content in Dolby Vision High Dynamic Range (HDR) and Dolby Atmos on LG smart televisions.

“This is a major step that our company is undertaking within a plan of expansion, which aims at making Rakuten TV the first choice of entertainment for Smart TV owners,” founder/CEO Jacinto Roca said in a statement.

“This is proof of our commitment with providing an always better experience to cinema lovers. With this move, Rakuten TV will triple its presence on a continental level, strengthening its commitment to deliver the best cinematic experience at home.”

Thanksgiving, Black Friday Retail Traffic Rivals 2017 as E-Commerce Soars

Consumer foot traffic to brick-and-mortar retail stores on Thanksgiving and Black Friday resulted in a combined 1% decline for the two-day period compared to last year, with a 1.7% decline in traffic on Black Friday versus 2017, according to new data from ShopperTrak.

“The fact that the combined shopper visits remained almost the same this year compared to the last three years proves that the notion of Black Friday not being popular anymore is a myth,” Brian Field, senior director of global retail consulting for ShopperTrak, said in a statement.

The National Retail Federation predicted that about 164 million people would shop over the five days through Cyber Monday – which equals last year’s tally.

Meanwhile, online shopping over the holidays — much like e-commerce during the year — continues to grow exponentially.

Adobe reportedly expects online holiday shopping in November and December to increase nearly 15% from 2017. The tech company said Black Friday shopping on the Internet increased nearly 28% to $6.4 billion. Online shopping on Thanksgiving increased 28% to $3.7 billion.

Regardless, ShopperTrak estimates 80% of the holiday’s busiest shopping days are still ahead. The days include Super Saturday, which falls on Dec. 22, and the Sunday before Christmas, Dec. 23.

Notably, for the third year in a row, there are four Saturdays in December prior to Christmas Day, which will enhance the importance of both Dec. 8 and Dec. 15. In addition, similar to last year, the Saturday after Christmas, Dec. 29, is expected to be one of the busiest shopping days taking the last spot on the top 10 busiest day’s list.

“Shopping in physical stores during the holidays continues to be an exciting annual event for consumers and based on the Black Friday traffic data, retailers are in for a successful holiday season,” said Field.

 

NPD: Retail Websites Fighting Back Against Amazon & Co.

Amazon is the undisputed e-commerce behemoth, generating about $53 billion in revenue in its most-recent fiscal quarter — nearly five times the revenue generated by Walmart.com.

Yet, new data from The NPD Group finds 29% of U.S. online consumer electronics dollar sales were made through traditional retailer websites for the 12 months ending in June. During this timeframe, the retailer ecommerce sites gained online dollar share over third-party ecommerce (i.e. Amazon) primarily in high average sales prices (ASP) for products such as TVs, PCs, tablets, and printers.

Average online spending per purchase was four-times higher on traditional retailer websites ($233/purchase) than through pure-play online retailers ($60/purchase). However, pure play online retailers are seeing an average of five additional annual purchases, when compared to traditional retailer websites, providing more occasions to sell.

Traditional retailer websites made up 46% of online U.S. consumer electronics dollar sales for these higher ASP items, up 3% from the prior-year period. For lower ASP items they make up 13% of dollar sales, as pure play online retailers still dominate this more ‘grab and go’ segment.

“Across the retail landscape traditional retailers are finding success in bringing what they do well in store to the online channel,” Stephen Baker, VP, industry advisor for the TNP Group, said in a statement.

Baker said traditional retail is competing effectively with Amazon and others for higher-priced items by leveraging their merchandising expertise and the strong in-store product selections on their e-commerce platforms.

“This approach is clearly paying off in the CE industry, as evidenced by growing online sales across a variety of categories,” he said.