Hayley Peterson/Business Insider
- E-commerce growth remains elevated even after the peak COVID-19 stockpiling period in March, according to data from IRI.
- E-commerce sales for consumer packaged goods, like food and household products, grew 83% during the April to early July period compared to last year.
- IRI expects e-commerce growth to remain strong as consumers stick to online shopping amid the pandemic and retailers invest more heavily in their online businesses.
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One of the silver linings of the COVID-19 pandemic has been the rapid rise of e-commerce, as more people shopped online while sheltered at home.
The lockdown-driven shift to online shopping, which started to gain steam in March, appears to have accelerated even more in recent months, as more people realized the convenience of e-commerce and companies increased their investments in the space, according to recent data by market research firm IRI.
In a report published last week, IRI wrote that e-commerce sales for consumer packaged goods, like food and household products, grew almost 83% during the April to early July period compared to a year ago. That's an increase from the roughly 62% jump seen during the peak stockpiling period of March, the report said. Other channels like grocery and dollar stores also saw significant growth during the same time frame.
As a result, e-commerce is taking up a larger share of household spending. According to IRI, the percentage of households buying online grew 8 percentage points from March to July, to almost 33% of total. The amount of money spent on e-commerce for each household also jumped 38% to $250 per month, the report said.
All this is showing up in huge sales growth for e-commerce businesses. Amazon far exceeded Wall Street expectations for the second quarter, reporting 40% sales growth for $88.9 billion in quarterly revenue last week. Walmart's US e-commerce sales soared 74% in May, backed by strong curbside picked demand, while Target reported 141% growth in its first-quarter e-commerce sales.
IRI expects e-commerce growth to stay strong going forward as consumers remain cautious of in-store shopping and large retailers continue to invest in its online shopping businesses. For edible products, e-commerce is expected to account for up to 12% of total dollars spent by next year, and up to 35% for non-edible products.
"While some new CPG e-commerce users will switch back to in-store, conversion will stick for many as in-store safety concerns remain and e-commerce purchase habits take hold," IRI wrote in its report.
You can download the full report here.
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