“Ecommerce is definitely crucial for omnichannel growth ... especially in a year where brick and mortar is struggling, and we see a lot of brands are basically making the numbers because they are able to accelerate ecommerce. And you have to tell your leadership team if they are pulling back investment in ecommerce [that] they have a big risk to lose overall omnichannel market share,” Oskar Kaszbuski, founder and chief growth officer at firstmovr, shared in the webinar.
Ecommerce sales are up, but growth dips slightly in 2024
Over the last several years, ecommerce dollar growth has outpaced brick-and-mortar sales with food and beverage among some of the top categories for growth, according to Circana data shared in the webinar.
Omnichannel dollar sales — including ecommerce and store sales — reached $865 billion for the 52 weeks ending Aug. 20, growing 1.3%, according to Circana Complete E-commerce data.
For the year to date, approximate $721 billion came from in-store sales and $145 billion from ecommerce sales, which grew 9.7% over last year’s sales for the timeframe. Similarly, ecommerce units grew 10.3% over in-store units, which declined 1.6% for the 52 weeks ending Aug. 18.
Ecommerce sales for general food grew by 11.1% and beverages by 11.7%, compared to in-store sales, which rose 0.8% and 1.6%, respectively.
However, ecommerce growth slowed slightly this year compared to previous years. Ecommerce sales were $133 billion for the 52 weeks ending Aug. 20, 2023, growing 13.2% from 2022 numbers, which were $117 billion.
‘We are going to see brands losing share ... if they do not invest in ecommerce’
Given the growth of ecommerce channels, many brands and retailers have prioritized developing omnichannel shopping experiences, including direct-to-consumer offerings and in-store pickup options.
“The gap between ecommerce growth and brick-and-mortar growth is widening, so ecommerce is absolutely critical for success,” Kaszbuski said. “We are going to see brands losing share despite [being] able to hold on to their share for years and years if they do not invest in ecommerce and make it a part of their overall omnichannel strategy.”
Most manufacturers (75%) said that digital commerce is a strategic priority and a primary growth driver, according to a DCG Digital Shelf Optimism report shared in the webinar. However, 41% of manufacturers do not fully understand the requirements and capabilities of digital retailers, and 60% said they do not understand all the digital shelf metrics they report.
Despite the channel’s growth and importance, some brands and retailers are shifting their focus back to brick and mortar and taking digital resources (i.e., budget) with them, which can impact negatively a digital team’s ability to continue to deliver growth, Kaszbuski explained.
Additionally, some executives are slashing technology spending to create omnichannel shopping experiences, as part of what has been called “the year of efficiency.”
“A lot of the C-suite [and] a lot of the sales leads are basically saying, ‘Well, I can shift ecommerce resources to brick and mortar because I need to defend brick and mortar and find the pathway to growth.’ We see a lot of ecommerce teams that [are] actually getting downsized because [brands and retailers] are basically saying, ‘Well, I feel good about my digital strategy. I really need to reinvest some of that money into brick and mortar or maybe profit protection, etc.’ This is not the right time ... to do that, and you have to have an honest conversation with your executive team,” he elaborated.
Updating content can be key to boosting sales
Beyond securing technology budgets, ecommerce teams also can boost sales by creating engaging content across their platforms, which often means regularly updating images and text that live on product pages, Kaszbuski explained.
Carbonated beverage brands that saw greater growth than the category average updated primary images, titles, descriptions and bullets 10.1, 6, 1.7 and 1.5 times, respectively, on average for the 52 weeks ending Aug. 11, according to Circana Complete E-Commerce data. Carbonated beverage brands that fell below the category average updated their primary image, title, descriptions and bullets, 6.1, 5.2, 0.5 and 0.5 times, respectively, for the same time period.
“At the moment with Gen AI, there is really no reason why we should not have better content assets, not only for the top retailers in the US but even for some of the smaller retailers. We can actually keep on adjusting that content and make content updates more frequent,” Kaszbuski elaborated.
