Lockdown takes ecommerce to 40%

This post is by Benedict Evans from Essays – Benedict Evans

The growth of ecommerce has always fit the old line about a frog in boiling water. Every year, the share of retail taken by ecommerce rose a little higher, and physical retailers got a little more uncomfortable (and recently have started failing), but the growth in any given year was never dramatic enough to make headlines. That was until 2020, of course – now we’ve had a reset. Lockdowns triggered a huge spike in online sales of every kind, but then the question was where this would stabilise – once things started to calm down, where would the new level be set? We’re now starting to see.

In the USA, where lockdowns have been pretty patchy, ecommerce was ~17% of addressable retail at the beginning of the year. It spiked up to 22.5% in Q2 and in Q3, reported last week, it dipped back to close to 20%. In the UK, where we have monthly data that makes the picture clearer, penetration was already 20%, spiked to over 30% and now seems to be stabilising in the high 20s.

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You have to be careful about the denominator here – if physical retail was closed, what does a percentage tell you? Hence, the next charts show you ecommerce and physical retail in absolute terms. The UK had a painful lockdown of physical retail, but ecommerce has stabilised at the same level in absolute terms even as it came out of that. Some of this may be because we’re still wearing masks (Read more…)