Bringoz Industry Weekly 6/25O
mnichannel grocery consumers shop more frequently and spend up to 20% more than in-store only consumers. Amazon is projected to rake in more than 40% of the nation’s eCommerce sales by the end of 2021. Target’s U.S. eCommerce sales will reach $18.64 billion this year. Read about these stories and more in our weekly industry news roundup.
Omnichannel Consumers Spend Up to 20% More, Report Finds
Omnichannel grocery consumers shop more frequently and spend up to 20% more than in-store only consumers, according to an analysis by Symphony RetailAI of 421 million baskets purchased in the U.S. and Europe in the first quarter. Of shoppers who made an online grocery purchase in Q1, 70% made another digital purchase during the same quarter. That’s up from 50% of shoppers who made a repeat purchase in Q1 of 2020. Retailers should view eCommerce in terms of customer loyalty rather than pure channel economics, according to Symphony RetailAI. That loyalty, however, may continue flowing to large chains investing in price and technology. Read more on Grocery Dive.
How Are Retailers Adapting to Prime Day
This week was a big one for the retail industry with major retailers holding annual sales events. Amazon’s Prime Day celebrated its seventh year with its two-day sales event which took place June 21 and 22. According to data from the Adobe Digital Experience Index, total U.S. online spend across retailers surpassed $11 billion during the 48 hours of Prime Day. This includes $5.6 billion on day one and $5.4 billion on day two, representing 6.1% growth compared to $10.4 billion in total Prime Day 2020 online revenue. Here’s a look at how Prime Day has affected brick-and-mortar retailers and what they are doing to compete in the omnichannel retail landscape. Read more in our blog here.
As eCommerce Sales Proliferate, Amazon Holds on To Top Spot
As Amazon prepares for its annual Prime Day, its reign as the biggest online retailer in the country is eye-popping: It’s projected to be raking in more than 40% of the nation’s eCommerce sales by the end of 2021. Amazon’s dominance on the internet has only grown as shopping online becomes second nature for many consumers. That’s exactly what has transpired over the past 13 years. In 2008, eCommerce sales accounted for just 3.6% of total retail sales in the United States, according to data from eMarketer. Following gradual growth year after year, that figure skyrocketed to 14% in 2020. Ecommerce sales are predicted to account for 15.3% of total retail sales by the end of this year and jump to 23.5% by 2025, eMarketer said. Read more on CNBC.
Target Will Top $18B in US eCommerce Sales This Year
This year, Target’s U.S. eCommerce sales will reach $18.64 billion—almost as much as all of its U.S. eCommerce sales from 2016 to 2019 combined. The company’s omnichannel services are a key force behind this acceleration, and its same-day services, in particular, have played an integral role. During Target’s Q1 2021 earnings call, CEO Brian Cornell said more than 95% of the quarter’s sales—both online and offline—were driven by the brick-and-mortar stores. Curbside pickup is another service that’s been a major driver of growth. As a share of digital sales, curbside pickup sales increased by more than 600% in Q1 compared with the same quarter in 2019, according to the earnings call. Read more on eMarketer.
US Needs 330M Square Feet of Warehouse Space
The U.S. will need to add 330 million square feet of warehouse space dedicated to online fulfillment by 2025 in order to keep pace with the expected uptick in eCommerce sales over the same time period, according to a recent report from CBRE. The report expects eCommerce sales in the U.S. will increase to 26% of retail sales by 2025. Globally, there will need to be an increase of 1.5 billion square feet to keep up with a $1.5 trillion uptick in eCommerce sales by 2025. Vacancy rates for industrial real estate space have been low across the U.S. for months. “[A] significant amount of new construction will be needed in the next few years just to keep pace with robust demand,” John Morris, executive managing director and leader of CBRE’s Americas Industrial and Logistics and Retail businesses, said in a statement. Read more on Supply Chain Dive.
Walmart’s AI is Getting Smarter About Grocery Delivery
Walmart shared information about how it’s training its AI to make smarter substitutions in online grocery orders. According to Srini Venkatesan, an executive vice president at Walmart Global Tech, it’s the sheer quantity of data that Walmart can use to teach its AI. Over 200 million people shop at Walmart in-store and online each week for more than 150,000 different grocery products. The AI uses that data to predict consumer behavior, preferences and needs. “The tech we built uses deep-learning AI to consider hundreds of variables — size, type, brand, price, aggregate shopper data, individual customer preference, current inventory and more — in real time to determine the best next available item,” explained Venkatesan. Read more on TechCrunch.
Total Online Sales During Amazon Prime Day Exceed $11B
According to Adobe Digital Economy Index data, total U.S. online spend across all retailers surpassed $11 billion during the 48 hours of Prime Day (June 21-22). This includes $5.6 billion on day one and $5.4 billion on day two, representing 6.1% growth compared to $10.4 billion in total Prime Day 2020 online revenue. Total online revenue surpassed $10.9 billion in online revenue recorded on Cyber Monday, the largest single online shopping day in U.S. history. The first day of Prime Day was the biggest online sales day in the U.S. for 2021 so far, followed by the second busiest. Read more on Chain Store Age.