Retail in Transition: Future E-commerce Opportunities in North America

July 2021

The digital revolution has been rewiring retail for years. The COVID-19 pandemic accelerated this transition as e-commerce became the default setting for many homebound consumers. The crisis-inspired surge in e-commerce is leading to a permanent shift in retail, creating new challenges as well as new opportunities for retailers and consumer brands alike. This report explores those opportunities and challenges in North America.

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Key findings

North America leads all global regions in e-commerce penetration

After briefly ceding the crown to the Asia Pacific region, a pandemic-driven surge in digital sales has once again made North America the global leader – across all regions – in terms of the percentage of goods bought online across the total retail sector.

Huge increase in food and drink e-commerce sales powers 2020 gains

Due to the COVID-19 pandemic, North America witnessed a massive increase in e-commerce spending in 2020, much of which was driven by consumers shifting a portion of their grocery spending from store-based to digital channels.

Younger consumers led the charge, but all age groups shifted spending online in 2020

Across North America, consumers across all age groups reported making more purchases online in 2020 than they had in the previous year, including consumers aged 60+. Those in the 30-44 age group reported the highest rate of digital purchases, with those in the 15-29 age group reporting the highest rate of mobile purchases.

Expansion of kerbside pick-up service has brought e-commerce to new customers

In North America, the adoption and expansion of kerbside pick-up service by omnichannel retailers was one of the principal sources of e-commerce sales growth in 2020. Kerbside pick-up looks set to continue to boost digital sales going forward, as consumers appreciate the convenience and time-savings the service model provides.

Consumer electronics has massive unrealised online sales potential

According to Euromonitor International’s E-commerce Readiness Model, the consumer electronics industry in North America stands out for its untapped potential for digital sales gains that would not require any infrastructure expansion based on market dynamics entering the pandemic.

Apparel to contribute the largest share of digital sales growth between 2020 and 2025

Looking to the forecast period, Euromonitor International expects that sales of apparel and footwear products will account for a greater share of e-commerce absolute value sales growth in North America between 2020 and 2025 than any other product category.

About the report
Key findings
In 2020, North America passes Asia Pacific in share of goods bought online
Growth in North America driven by pandemic-induced shifts in behaviour
Case study: Amazon cements its status as the “everything store”
Category spotlight: Food and drink e-commerce comes into its own
Case study: Instacart emerges as an indispensable service provider
E-commerce gains ground across every product category in 2020
Gains in m-commerce users more subdued than e-commerce as a whole
Consumer spotlight: Younger consumers are leading the digital shift
Shopping behaviours also evolve in other ways as a result of the crisis
Trend: Ubiquitous kerbside pick-up will be a legacy of the pandemic
Case study: Loblaw profits by expanding kerbside pick-up service
Identifying the markets most primed for sustained e-commerce growth
E-commerce growth possible through optimisation rather than expansion
Consumer electronics appears ripe for e-commerce sales growth
Mobile phones category accounts for a third of unmet potential in the US
Case study: Best Buy makes decisive pivots to capture more online spend
North American e-commerce sales set to grow by USD566 million by 2025
Apparel and fashion to drive projected e-commerce sales growth
Case study: Nordstrom makes digital strides but faces an uncertain future
Key opportunities
Key challenges still to overcome
Key takeaways about e-commerce in North America
Recommendations for how to win in retail’s digital-first era
What to consider when evaluating your e-commerce strategy
Learn more about how to win in the digital-first era
About the survey methodologies
About the E-Commerce Readiness Model

Retailing

Sales of new and used goods to the general public for personal or household consumption. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts, fuel. Also excludes foodservice, rental and hire and wholesale industries (Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retailing is the aggregation of Store-based retailing and Non-store retailing. Retailing 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, ie retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer which 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 retailing. In relation to click and collect purchases (i.e. where purchases are made over the internet but picked up at store) where the sales data is attributed depends on where the payment is made: If payment is made in store, then the sale is included in store-based sales. If payment is made over the internet, then the sale is included in internet retailing.

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