A recent study by ecommerce funding firm 8fig revealed that 52% of online stores reported growth in Q2 of 2022 compared to Q2 of 2021. These results defied an expected decline in online sales as consumers return to in-person shopping.
Governments have begun to relax their COVID-19 mandates in efforts to sustain the reopening of their economies. In the United States, a third of workers are expected to be back physically in their offices by the end of 2022. Schools and universities are also resuming face-to-face classes.
This increase in mobility is allowing in-person shopping to come back as part of people’s routines. Because of this, there has been a growing belief that online sales are to enter a downtrend as more people venture out and go about their activities physically rather than virtually.
However, 8fig's study shows that the resurgence of in-person shopping is not happening just yet. Analysis of the financial data gathered from 543 Amazon and Shopify stores revealed that over half of the businesses surveyed still saw an uptick in sales this Q2 compared to their previous year’s figures.
The pandemic gave ecommerce a major boost. During the first year of the pandemic in 2020, ecommerce sales increased by 43% or $244.2 billion from 2019. Health mandates compelled consumers and businesses to shift transactions to online channels.
The sustained growth by over half of businesses, while not as strong as the initial boom, indicate that the trend is still pointing upwards.
According to the 8fig study, electronics is the strongest segment, with 76% of stores under the category reporting increased sales. Nearly a third of businesses in the health segment also experienced growth. Over half of stores selling home and baby products also generated more business over the past year.
However, not all categories were able to sustain their growth. Online sales of fashion and beauty products declined, with only about a third of businesses in these categories experiencing an uptick in sales
There is also a stark difference between Amazon and Shopify stores’ performance. 60% of Amazon stores included in the study posted stronger year-on-year numbers. In contrast, only 41% of those on Shopify showed growth.
Other studies also affirm the research’s general findings. Data from a Cowen study shows that global ecommerce penetration is still expected to widen in the coming years. US online grocery shopping in Q1 2022 is already double from Q4 of 2019, indicating that consumers are now comfortable buying their basic needs online. Similar trends on online grocery sales are also being observed globally.
Insights from these studies even point at the possibility that buyer behaviors may have already shifted. Consumers appear to be becoming more comfortable using online stores to avail of certain products and services. A full return to pre-pandemic life remains unlikely for now, so the preference for online shopping may endure.
Even big tech companies seem to affirm the projected growth of ecommerce. For example, Google is set to roll out a new search function for ecommerce. It allows retailers to serve customers relevant search results, potentially helping improve buying experiences and raise stores’ conversion rates. YouTube is also set to implement a “products you see in this video” feature.
Aside from this support from big tech, new funding platforms targeted specifically for ecommerce are also emerging. These platforms provide businesses with financing plans that are customized to drive growth. A fresh influx of capital should enable stores to capitalize on these positive trends whether through expansion or the improvement of their fulfillment capabilities.
Such developments should come as welcome news to ecommerce entrepreneurs. As buying behaviors shift and online stores become preferred channels for transactions, online stores can look for opportunities to further bolster their business. They can venture into the stronger segments and optimize their products and services to cater to the emerging demands of the market.
Governments have begun to relax their COVID-19 mandates in efforts to sustain the reopening of their economies. In the United States, a third of workers are expected to be back physically in their offices by the end of 2022. Schools and universities are also resuming face-to-face classes.
This increase in mobility is allowing in-person shopping to come back as part of people’s routines. Because of this, there has been a growing belief that online sales are to enter a downtrend as more people venture out and go about their activities physically rather than virtually.
However, 8fig's study shows that the resurgence of in-person shopping is not happening just yet. Analysis of the financial data gathered from 543 Amazon and Shopify stores revealed that over half of the businesses surveyed still saw an uptick in sales this Q2 compared to their previous year’s figures.
The pandemic gave ecommerce a major boost. During the first year of the pandemic in 2020, ecommerce sales increased by 43% or $244.2 billion from 2019. Health mandates compelled consumers and businesses to shift transactions to online channels.
The sustained growth by over half of businesses, while not as strong as the initial boom, indicate that the trend is still pointing upwards.
According to the 8fig study, electronics is the strongest segment, with 76% of stores under the category reporting increased sales. Nearly a third of businesses in the health segment also experienced growth. Over half of stores selling home and baby products also generated more business over the past year.
However, not all categories were able to sustain their growth. Online sales of fashion and beauty products declined, with only about a third of businesses in these categories experiencing an uptick in sales
There is also a stark difference between Amazon and Shopify stores’ performance. 60% of Amazon stores included in the study posted stronger year-on-year numbers. In contrast, only 41% of those on Shopify showed growth.
Other studies also affirm the research’s general findings. Data from a Cowen study shows that global ecommerce penetration is still expected to widen in the coming years. US online grocery shopping in Q1 2022 is already double from Q4 of 2019, indicating that consumers are now comfortable buying their basic needs online. Similar trends on online grocery sales are also being observed globally.
Insights from these studies even point at the possibility that buyer behaviors may have already shifted. Consumers appear to be becoming more comfortable using online stores to avail of certain products and services. A full return to pre-pandemic life remains unlikely for now, so the preference for online shopping may endure.
Even big tech companies seem to affirm the projected growth of ecommerce. For example, Google is set to roll out a new search function for ecommerce. It allows retailers to serve customers relevant search results, potentially helping improve buying experiences and raise stores’ conversion rates. YouTube is also set to implement a “products you see in this video” feature.
Aside from this support from big tech, new funding platforms targeted specifically for ecommerce are also emerging. These platforms provide businesses with financing plans that are customized to drive growth. A fresh influx of capital should enable stores to capitalize on these positive trends whether through expansion or the improvement of their fulfillment capabilities.
Such developments should come as welcome news to ecommerce entrepreneurs. As buying behaviors shift and online stores become preferred channels for transactions, online stores can look for opportunities to further bolster their business. They can venture into the stronger segments and optimize their products and services to cater to the emerging demands of the market.
