Amazon + COVID-19
Prior to COVID-19, Amazon was estimated to net $81.2 billion in revenue in Q2 2020. Because of the pandemic, Amazon allocated $4 billion in additional spend to keep customers and employees safe and increase deliveries after prioritizing only essential items.
The ecommerce giant’s Q2 2020 numbers actually ended up totaling $88.9 billion, marking 40% year-over-year growth. YOY growth was especially impressive for grocery sales, which tripled YOY after Amazon increased its grocery capacity by 160% amid the pandemic.
In the UK, 35% of all online purchases during the lockdown period were made via Amazon, with one-fifth of survey respondents saying they now have a higher intent to purchase from Amazon post-pandemic. Free delivery, availability, and price were the top three key online purchase drivers for this group of consumers.
Amazon Prime Day 2020 Prep in a COVID-19 World
Prime Day began in 2015 as a celebration of Amazon’s 20th birthday. It quickly grew from a $415M event to more than $7B in 2019. But with COVID-19, supply chain & inventory disruptions, economic unrest, and the uncertainty of Prime Day official date(s), 2020 has created a perfect storm that even the most proactive brand executive couldn’t have predicted.
In our Amazon Prime Day 2020 Prep video series, we dive into everything from inventory planning to digital advertising strategies. Watch the videos here to make sure you’re ready to weather the storm during an unprecedented Prime Day. You’ll gain access to the following sessions:
- The New Normal for Prime Day in 2020
- Inventory Planning + Merchandising
- SEO + Retail Readiness
- Amazon Prime Day Digital Advertising Strategies
COVID-19: H1 2020 update
According to new data from Digital Commerce 360, online spend with U.S. retailers grew 30.1% – that’s $60.42 billion – year-over-year for the first six months of 2020 to reach a total of $347.26B. From 2018 to 2019, ecommerce sales grew just 12.7%.
Total retail sales were up 4% YoY, with online spending representing 18.6% of this growth.
In Q2 2020, $1 of every $5 spent by U.S. consumers came from online orders. Online spend with U.S. retailers grew 44.4%, with a total of $200.72B spent during this period.
The ecommerce sales growth is slowing now that many stores across the country have been reopening. Ecommerce sales were up 76% ($73.0B) YoY in June 2020, followed by 55% ($66.3B) in July.
COVID-19 news & industry updates
- Prime Day’s proximity to Cyber 5 introduces yet another new factor to consumers’ changing holiday shopping habits in 2020. In this video replay, our ecommerce experts pinpoint online strategies that are here to stay, top considerations to keep in mind as you plan for the unprecedented, and how you can still leverage your 2019 data to forecast for the holidays.
- Next week, Amazon will host Amazon Accelerate, a three-day virtual conference designed to help SMB Marketplace sellers navigate “a strong finish to 2020 and beyond.”
- Digital initiatives like BOPIS (buy online, pick up in-store) have been crucial for big box retailers during the pandemic, with BJ’S Wholesale announcing big plans to expand these initiatives after seeing 300% digital growth YoY.
- According to eMarketer research, the number of smartphone food delivery app users is forecasted to rise 25.2% this year, with adoption anticipated to continue through 2023.
- Home Depot had a very successful Q2 due to do-it-yourself projects taking off during the pandemic, with sales soaring 23.4% YoY at a 10.1% higher AOV and transactions increasing by 12.3%.
COVID-19 industry updates
For better or for worse, no industry has gone untouched by COVID-19. In every edition of our biweekly COVID-19 Compass newsletter, we share updates from various industries on how they are being impacted by the pandemic. Here’s a look at what you may have missed.
PS: If you’re not currently signed up for the COVID-19 Compass, you can subscribe here to get it delivered to your inbox every other week!
- Retail. Global retail sales are expected to dip by 5.7% this year due to the coronavirus pandemic. Online purchases of clothing, however, are up 76.7%, with online revenue up 22.2% – but average order value down 54.5%.
- Homemade goods. The market for handcrafted items like masks and home furnishings has exploded during the pandemic, with sales spiking 146% on Etsy’s marketplace as a result.
- Grocery. Online grocery has seen continued growth throughout the pandemic, with online grocery sales for delivery and pickup increasing 9% from May to June.
- Travel. Due to COVID-19, U.S. digital travel sales are expected to drop 44.7% in 2020 after staying mostly stagnant in previous years. Most sectors of the travel industry won’t recover from the pandemic until at least 2022, with most consumers planning to either not vacation at all or to stay in their country or local area.
- Automotive. Previous challenges faced by the automotive industry have been exacerbated by coronavirus, with China experiencing a more than 80% drop in sales for light vehicles due to the pandemic.
- Technology. Demand for communications equipment and cloud infrastructure is forecasted to continue growing, although many factories are experiencing serious challenges with resuming production.
Mobile ad spend rising despite pandemic
While total overall U.S. ad spending is down due to COVID-19, mobile ad spend will increase by 4.8% to reach $91.52B in 2020.
According to new data from eMarketer, while mobile is one of the few ad formats expected to churn out growth this year, the growth is much smaller than it was projected to be before coronavirus. Prior to the pandemic, mobile was projected to grow to $105.34B in 2020.
Without mobile’s projected growth, U.S. digital ad spend would shrink this year. Digital ad spend isn’t projected to reach pre-pandemic levels until at least 2024.
Overall U.S. ad spend (not just digital) is now expected to drop $16.40B this year instead of growing $20B as was expected pre-pandemic.
For more recent COVID-19 + ecommerce news, see some of our additional resources: