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, ecommerce has seen an uptick as traditional retail shuttered or reduced normal operations to help curb 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.

Report: Average Daily SVOD Consumption Tops 1 Hour

The average time spent with subscription OTT video content in the U.S. will surpass 62 minutes per day this year, up 23% from 2019 and 38% since 2018, according to new data from eMarketer.

The research firm contends a plethora of new streaming platforms, including Disney+, NBCUniversal’s Peacock, Quibi, Apple TV+ and HBO Max (WarnerMedia), have accelerated home entertainment options for people spending greater percentage of their time in the home due to the coronavirus pandemic.

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The average time spent with Netflix domestically will surpass 30 minutes per day, up more than 16% from 2019. Amazon Prime Video, the third-most-popular streaming platform after Netflix and Hulu, is projected to see a 19.1% increase this year to nearly nine minutes per day.

As cord-cutting speeds up, more video consumption will shift to SVOD. The cancellation of live sports, as well as growing unemployment, will cause some consumers to cancel their cable subscriptions. In fact, eMarketer says 9.2% of respondents to their survey said they had already canceled or were planning to cancel their pay-TV subscription due to the pandemic.

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The survey, conducted on March 31, is indicative of the U.S. population on the criteria of gender, age, income, and living area. Most of these consumers are likely to replace traditional TV with digital video, leading to more time consuming subscription OTT content.

“Subscription streaming will remain the most popular way of consuming digital video for the foreseeable future,” wrote Blake Droesh, author of the report. “By the end of our forecast period, time spent will reach 70 minutes a day. That’s nearly 54% of daily time spent with digital video, which will average 130 minutes per day in total.”

Droesh cautions that daily time spent with digital video will eventually hit a ceiling due to market saturation.

“Any new-to-market subscription OTT services are unlikely to boost time spent,” he wrote. “Instead, they’ll have to edge out existing services for a piece of the pie.”

Analyst: ESPN+ Approaching 15 Million Subs as Sports Goes Digital

As live sports readies for a return with or without live spectators, people consuming sports at home on digital platforms is projected to increase, according to new data from eMarketer.

Disney-owned ESPN+ ($4.99) is expected to reach 14.9 million viewers this year, representing 40.8% of digital live sports viewers in the country. The platform grew rapidly last year thanks to a $9.99 bundle with Disney+ and Hulu.

eMarketer said 36.5 million people in the country will watch live sports digitally this year (when they resume) — including 23.7% watching via digital channels.

Almost half of those digital viewers will watch live sports through online platforms, including Sling TV, Hulu with Live TV, FuboTV and YouTube TV. The research firm says 17.1 million people will watch live TV on these platforms, up 13.3% from 2019. And 69.3% of online TV subscribers will use vMVPDs to watch live sports.

“In recent years, TV networks and pay TV providers have relied more on live sports as cord-cutting and audience erosion accelerate,” analyst Eric Haggstrom said in a statement. “Live sports represents billions of dollars in advertising and affiliate fees for the networks. Advertisers are eagerly awaiting the likely return of live sports in the fall as it is one of the few ways to reach a large, younger audience at scale.”

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%.

Report: COVID-19 Changing Consumer Interest in Video Ads, News Programming

With social distancing, economic shutdown and consumer habits turned on their ear during the coronavirus pandemic, new research from eMarketer finds people are increasingly seeking out news on the virus for updates and intel on the near future.

The research group in separate online surveys conducted on March 12 and April 3, respectively, with more than 1,000 respondents, found that in less than a month’s time between surveys, there was a 12% growth in consumers seeking out coronavirus-related content online. In March, 58% of 1,042 respondents said they sought out virus-related content. That percentage jumped to 65% of 1,120 respondents in April.

Compared to the first study, there’s been a surge in news consumption — 75% of respondents are now consuming more news in general, compared to 59% in March.

Between the first and second surveys, eMarketer said it saw little change in consumer likelihood to engage with ads, indicating that consumers remain uncertain about responding to advertisements during this time. However, most respondents said that ads appearing next to coronavirus content wouldn’t change their opinion of the brands.

In March, respondents said they felt that advertising alongside coronavirus content was mostly fine — in April they now feel that it depends on the brand. Among brands respondents don’t want to see associated with virus news, include travel (53%), real estate (40%), automobiles (33%), food & beverage (32%) and banking, finance (28%).

Brands respondents said they do want to see include healthcare (56%), government (42%), education (34%), non-profit (35%), tech and telecom (25%).

eMarketer found that among respondents brand advertising alongside positive headlines generates the most favorable responses. When given two examples of positive, neutral, and negative news headlines, respondents were increasingly favorable toward a brand as the sentiment of the content changes from negative to neutral to positive.

“Consumers are more likely to engage with ads next to coronavirus content if seen on premium and recognizable news sources,” read the report. “Consumers have more favorable responses to advertisements that appear alongside positive coronavirus news and content.”

Analyst: COVID-19 Impacting Digital Video Ad Spending

The ongoing coronavirus pandemic has turned the global economy on its head, leaving digital video advertising at a crossroads and one analyst unsure whether the change will be positive or negative.

Longtime online research firm eMarketer contends the pandemic could see U.S. spending on digital video advertising increase as much as 7.8% during the first half of the year — or decrease by 5.2%.

“That’s about $3 billion to $5 billion less [in spending] than we expected,” principal analyst Nicole Perrin wrote in a note. “Our previous U.S. digital ad spending forecast completed on March 6, called for a 26.2% increase in digital video ad spending for the full year.”

The New York firm said domestic advertisers increased their Q1 video ad spending from 10.5% to 17% — up enough in January and February to amount to a double-digit increase for the quarter.

Perrin expects video ad spending to decline upwards of 1.3% in Q2, beginning in March and continuing through June. Travel advertisers will make the deepest cuts to their digital video budgets, followed by media and entertainment advertisers.

Regardless, the analyst believes video is more insulated than other formats because it has been in demand for a while.

“Falling prices due to reduced overall demand will make video placements even more attractive compared with static banner ads,” Perrin wrote. “The qualities that make video stand out to advertisers — sound and motion — are especially appealing for branding-oriented efforts, which many companies are now focused on.”

Analyst: TikTok to Surpass 50 Million Users in U.S. by 2021

After nearly doubling its U.S. user base last year, growth for TikTok, a Chinese video-sharing social networking service, will slow in the coming years as competition heats up and concerns grow among marketers, according to new data from eMarketer.

TikTok’s domestic U.S. user base will grow 21.9% in 2020 to 45.4 million people. By 2021, it will surpass 50 million (52.2 million). This follows 97.5% growth in 2019, as the short-form video platform drew in a huge number of users, especially children and teens. Growth will slow to single digits in 2022 as the app becomes heavily saturated among core younger users.

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“TikTok had a breakout year in 2019, and it is incredibly popular among teens at this point,” analyst Debra Aho Williamson said in a statement. “Some are spending multiple hours per day on the app, which is a testament to the incredible stickiness of its scrolling video format. But it has yet to develop a strong following among older generations.”

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This year, 21.6% of U.S. social network users, or more than one in five, will use TikTok at least once a month. Despite having lower penetration than more established competitors, it’s one of the few social apps whose penetration is growing.

 

Linear TV Still Trumps Digital in 2020 Political Ad Spending

As campaigning for the 2020 presidential election heads into its final months, political ad spending will hit an all-time high. The hyper-partisan political environment is driving more money than ever into advertising.

New data from eMarketer on federal, state and local political ad spending, including PAC ads for candidates and lobbying activities, finds the 2019/2020 election cycle will reach $6.89 billion.

This is 63.3% higher than the $4.21 billion in spending in the 2015-16 political season, underscoring the intensity of not only the presidential race, but races for congressional seats as well.

Notably, while over-the-top video continues to cannibalize linear TV, political ad spending still resonates primarily on television.

eMarketer reports traditional TV will account for $4.55 billion in spending, with political TV ads representing 3.2% of all TV advertising and 66% of all political ad spending. TV’s share of political advertising is up a bit from the prior election year, as it takes share from radio and print.

“Political spending floods the TV airwaves during the last weeks before the election, raising prices and crowding out other advertisers,” analyst Eric Haggstrom said in a statement. “Despite cord-cutting and declining viewership, TV still offers strong reach, particularly among older Americans who are likely to vote.”

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Haggstrom said the vast majority of political spending goes to local broadcast or cable/satellite providers, as advertisers focus on states, or postal Zip Codes, that can swing an election.

In the 2019/2020 election season, political digital ad spending will grow to $1.34 billion — representing 19.4% of all political advertising and 0.5% of all digital spending. Digital jumps 203% over the 2015/16 presidential election season, when spending was $440 million.

Primary digital platforms for political ads: Facebook and Google/YouTube.

“One of the key benefits of digital advertising over TV is its targeting capabilities,” Haggstrom said. “Granular demographic, audience and list-based targeting allows political advertisers to efficiently reach the right people with the right message.”

 

Study: New SVOD Players to Challenge Netflix, YouTube Viewing Domination

The reign of Netflix and YouTube as top online video destinations globally is under threat from a new group of over-the-top platforms such as Disney+ and Apple TV+.

With HBO Max and NBCUniversal’s Peacock launching next year, global OTT video viewership will be fragmented further, according to new data from eMarketer.

The venerable dotcom research firm said Netflix in 2018 topped YouTube as the most-watched video service, with average daily consumption reaching 23.2 minutes compared to 22.3 minutes for YouTube.

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eMarketer claims, beginning in 2020, Netflix’s daily video consumption will decline from a peak of 27% to 25.7% by 2021. YouTube’s daily digital video time will drop from 23.4% to 21.7%.

“Even though Americans are spending more time watching Netflix, people’s attention will become more divided as new streamers emerge,” analyst Ross Benes said in statement. “The video streaming landscape will get crowded, which will drive down the share of time that people devote to Netflix.”

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While increased competition may impact Netflix’s global ranking, usage among its subscribers is projected to increase, according to eMarketer. Average daily Netflix viewing time among adult users is projected to increase 2.2% to 56.6 minutes per day in 2020.

2019 was the first year digital video topped 25.4% of users’ total digital consumption, which includes time spent on apps and surfing the Web, but excludes social media.

“Video streaming is a mainstream, daily routine for most U.S. adults, occurring on all devices and increasingly when viewers are on the go,” added analyst Oscar Orozco said. “In fact, an April 2019 study from OpenX found that nearly one-third of users of subscription streaming platforms say screen size has no impact on what they watch or for how long. Because of this, video will continue to be the main driver of digital media consumption in the coming years.”