Online Sales Exploded in 2020–But Mostly For Retail Giants

Online sales skyrocketed in 2020–but mostly for the largest retailers and well-known brands.

That’s according to a report on the top 500 retailers in North America, released Tuesday by Digital Commerce 360, a Chicago-based research and media firm. The Top 500, measured by the prior year’s online sales, generated a combined $849.5 billion worldwide in 2020, a 45.3 percent increase from the previous year. That was the largest year-over-year jump in growth rate since Digital Commerce 360 started the report in 2006.

The spoils of 2020’s e-commerce boom disproportionately went to the large, well-established brands like Amazon, Walmart, and Target that make up the top 500. While online sales increased for businesses of all sizes, the report found that “strong 2020 growth enabled the Top 500 to take market share from their smaller competitors in North America.” 

Consumers who were new to online retail largely turned to familiar, big-name brands, and larger companies were better able to handle supply chain and shipping issues that arose during the pandemic. “Last year, it was a lot of ‘How can people get essential items and PPE,'” says Fareeha Ali, research and editorial director at Digital Commerce 360, who wrote the report. “This year we’re not seeing that kind of demand.” 

Ali says she expects demand for essential goods will soon go back to normal, providing opportunities for small businesses to catch up and attract more customers. She suggests small businesses follow some of the customer service tactics that worked for the largest brands last year, such as offering the option to pay in installments through companies like Klarna and Afterpay, which provide interest-free payment plans. She also advises making curbside pickup a permanent feature, and being transparent with customers about shipping issues.

Toy and craft retailer Joann was the fastest-growing online business on Digital Commerce 360’s top 500 list, with a 342.3 percent increase in sales in 2020. Away, the New York City-based travel business, had the largest drop in online web sales of the group measured, at 33 percent.

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