Retail in Transition: Capitalising on Future E-commerce Opportunities

March 2021

The digital revolution has been rewiring retail for years, leading to new business models, commerce ecosystems and channels for reaching and engaging consumers. The COVID-19 pandemic accelerated this transition, as e-commerce became the default option for many homebound consumers. The crisis-inspired surge in e-commerce is causing a permanent shift in retail, creating both new challenges as well as new opportunities for retailers and consumer brands alike.

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This report comes in PPT.

Key Findings

Digital continues to disrupt the retail industry

The digital revolution has been rewiring retail for the last decade plus, leading to new business models, commerce ecosystems and emerging channels for reaching and engaging consumers. The COVID-19 pandemic has accelerated this transition to e-commerce, as homebound consumers turned to digital channels to obtain products.

E-commerce emerges as the default option for many consumers

Even prior to COVID-19 becoming a global pandemic, Euromonitor International had forecast that e-commerce would become the largest channel globally in 2020. Although the continued growth of e-commerce was likely to be a headline story in 2020, the intensity of the health crisis accelerated its development.

Future retail growth to be driven by e-commerce

Over the 2020-2025 forecast period, e-commerce is expected to account for more than half of the absolute value growth in the global retail market. To put that projected e-commerce growth in context, that expansion would be roughly the size of the total value of products sold across all retail channels just five years ago.

Digital has changed the rules of the game for those in the retail sector

Besides elevating consumer expectations, digital has changed how the retail industry operates. In recent years, the retail industry’s traditional wholesale model has been turned on its side due in part to the rise of direct-to-consumer brands, the growth of marketplaces and the resurgence of subscription services. Retailers and consumers brands have had to take a harder look at new channels and business models.

Technology is here to stay

The growing role of technology in retail will be one of the most pronounced long-term impacts of the global pandemic. COVID-19 has further underscored the role that tech can play in helping retailers and brands adapt to changing business conditions and ever-evolving consumer expectations.


About the report
Key findings
The Digital Revolution in Retail
Digital revolution has led to a more fragmented retail sector
COVID-19 accelerated the retail sector’s digital transformation
COVID-19 has accelerated the development of several retail trends
The key retail trend fuelled by the crisis was the e-commerce boom
E-Commerce Emerges as the Default Setting
COVID-19 drove radical change in the e-commerce marketplace
Digital growth in 2020 carried by the most sophisticated online markets
Category spotlight: online grocery reaches historic heights in 2020
Case study: Walmart’s US e-commerce business makes dramatic gains
E-commerce transformation is likely to be global and permanent
Case study: Shopee teaches its sellers how to hawk through livestreams
More developed e-commerce markets were better able to handle surge
Crisis-driven tech investment related to improving online experience
How Shopping Behaviours Continue to Evolve
E-commerce posted a double-digit percentage point increase during crisis
Consumers purchased across more categories at the height of the crisis
Consumer spotlight: younger consumers continue to drive digital shift
Consumers turned to mobile more for purchases during COVID-19
Shopping behaviours also evolved in other ways as a result of the crisis
Trend: going virtual will continue to supercharge the online experience
Trend: livestreaming emerges as a tool for engaging shoppers in real time
Case study: Alibaba’s live selling platform surges during COVID-19 crisis
Trend: last mile faces its day of reckoning as e-commerce skyrockets
Case study: Ohi uses nano-fulfilment centres to get items closer to homes
Identifying E-commerce Growth Opportunities
Identifying the markets best placed for sustained e-commerce growth
E-commerce growth possible through optimisation rather than expansion
Leading e-com markets China and US have the greatest unmet potential
Case study: Best Buy makes decisive pivots to capture more online spend
Fresh food accounts for more than half of unmet opportunity in China
Case study: F reshippo was positioned to capitalise on the digital surge
Mobile phone category accounts for a third of unmet potential in the US
E-commerce market is expected to expand by USD1 trillion by 2025
Regional spotlight: Latin America emerges as e-commerce growth story
Apparel and food to drive e-commerce opportunities at category level
Brands must ensure they have the right positioning and assortment
How to Win in the Digital-First Era
Digital has changed the rules of the game for those in the retail sector
Brands have been giving a harder look at new channels, business models
Marketplace business model is outpacing traditional wholesale model
Case study: Nike’s shift away from wholesale paid off during COVID-19
Case study: PepsiCo launches direct-to-consumer sites within a month
Retailers pursue new business models to capture and retain consumers
The retail sector also faces other challenges as e-commerce expands
Where retail should make tech investments to support digital growth
Why retailers and consumer brands must invest in technology
Recommendations for how to win in retail’s digital-first era
What to consider when evaluating your e-commerce strategy
About the Digital Consumer Survey and Voice of the Industry: Digital Survey
About the E-Commerce Readiness Model


Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.

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