E-commerce: Groceries goods are projected to keep increasing in 2021

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Due to the Covid-19 lockdown, e-commerce in general surged. As a result of immersion in the digital age, globalization and technological advances, online shopping has spread around the world, expanding opportunities for both entrepreneurs and shoppers, redefining the boundaries of commerce. Before the pandemic, E-commerce was growing at a not unimpressive rate of 4.5% per year globally, while in 2020, especially the third quarter of the year, an increase in e-commerce platforms was reported globally, in the US there was an up to 30% increase compared to 2019.

The restriction measures for outdoor activities and mainly with retailers are forcing both merchants and consumers to adopt online shopping modality. This has led to Items that would not usually be bought online such as groceries, becoming one of the categories that registered the highest growth peaks, especially in the second quarter of 2020, showing an increase of 221% compared to the second quarter of 2019. The lockdown coupled with opportunities offered by online stores.

Let’s look at the case of the Lidl offers, Lidl prepared a special of vegan products, this type of offers have their target, but at the same time, by making them for a stipulated time allows businesses to evaluate the response of users. This feedback and learning activity, in the chain of producer, distributor and consumer, is a great opportunity for the company to evaluate the response of users. Directing the buyers’ focus not only to the current necessity but also to the advantages of this shopping modality.

Shoppers have shown a higher level of engagement on brands’ and retailers’ social networks, reinforcing their interest in online shopping. Many of the stores that have not been able to adopt an online modality have faced bankruptcy due to long months of inactivity. If e-commerce was once an option, it is now a necessity for both large and small businesses to build an online presence.

Online shopping was not commonly an option for buying essential products, mainly because of the immediacy of going to the store and buying, while online shopping is more related to the package and the waiting period. The impossibility of buying freely in face-to-face shopping meant a paradigm shift, making agents explore and exploit all possibilities. Traditional offline advertising techniques suffered a huge decline, while the online presence of brands was reinforced, especially in social networks, with an increase in personalized advertising rates of 5%.

Even large stores are moving away from mass advertising, so users who have shown interest in certain products can find ads about that. Online advertising is displacing traditional marketing not only because of the costs, but also thanks to the two-way communication it offers with users. If we check Lidl’s networks, for example, we can see the communication between the brand and customers in the comments of their posts. The same happens with other brands such as B&M Stores and Home Bargains, the last one who usually makes giveaways among their followers to motivate them to get their products. The increase in online advertising has also increased by field, with education, groceries and health being the most highly exploited areas.

The democratization of the Internet has made possible the adoption of e-commerce as a stable and globalized way of trading. Not only has the presence of online businesses and their interaction with users increased, but also the number of financial service providers related to digital finance has skyrocketed. From online payment methods to providers and financing, the online finance ecosystem, which was already growing strongly, exploded in 2020; these financial services are steadily acquiring a larger presence, a clear example being the expansion in the use of digital wallets.

In countries with poor commercial infrastructure this has been a groundbreaking improvement for the consumption possibilities of the population, in Brazil, an alternative platform helps people to contact small merchants in their locality. It has also helped to increase people’s shopping possibilities, not limited only by their local stores, allowing them to get better prices, variety of products and helping competition in the market.

Although the third quarter of 2020 saw a decline in e-commerce, it still shows a 30% increase over the same period in 2019 according to the U.S. Census Bureau. The question of whether E-commerce will still have a strong presence in 2021 seems to suggest that it will, although probably with a significant decline compared to 2020 due to the gradual normalization of commercial activity. Nevertheless, it is a process that changes from country to country, as well as people’s consumption patterns, so it is possible to estimate a positive development in general terms of e-commerce in 2021.

However, this decline should not be taken as a bad indicator for e-commerce, as 2020 was an extraordinary case, on the contrary, it should be compared with 2019 figures, and appreciate the increase in the percentage of annual growth and how its impact expands in categories of basic necessities. 2020 expanded e-commerce globally and there was a reshaping of shopper paradigms, many of whom now consider online shopping a strong option over traditional shopping, even for items such as medicine, personal care and food.

The fact that large brands and franchises are increasingly integrating this model reinforces users’ confidence in adopting this purchasing modality in a long-term. Among all factors considered, there’s not only the sales percentages of major platforms, but also the integral development of the online finance ecosystem, how different financial models are integrated, and the interactions between users and brands. Everything seems to point to a future where finance and commercial exchange are increasingly heading towards the digital sphere.

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