Let’s take a trip back to 2010—and quickly get over your renewed sense of disappointment over the Lost finale—so we can talk eCommerce.
As 2019 wraps up, and with it, the 2010s decade also comes to a close, it’s paramount to look forward to what’s coming next for the eCommerce and email marketing spaces—and we’ll absolutely be doing that here on the Jilt blog. (We were so eager that we posted our first preview of email marketing in 2020 over the summer; more are coming in the next few weeks.) However, we also wanted to take a look backwards to see just how far eCommerce has come over the course of this decade—both to assess the “state of the industry” and to get a sense of just how much we can look forward to in the ‘20s.
Spoiler alert: It’s come really, really, really far.
So pull out your vuvuzelas, finish three-starring that level in Angry Birds, and also do anything else in your box of decade-old cliches as we take a look at these eight major ways that eCommerce has grown, changed, and evolved in the 2010s.
And by “a little bit,” I mean—at an incredible pace.
In 2010, eCommerce accounted for 7.2 percent of the total retail sales in the U.S. (Up, by the way, from one percent in 2000.) By the end of 2018, it had nearly doubled to 14.3 percent of total retail sales. (And although we don’t have the final tally on 2019 yet, eCommerce is on pace to account for 16 percent of total U.S. retail sales; more than double what it was at the beginning of the decade.)
eCommerce’s year-over-year growth rate in the U.S. never dipped below 13 percent through the course of the decade. The overall retail space’s year-over-year growth rate was never above five percent—meaning eCommerce’s growth significantly outpaced retail growth as a whole.
The total eCommerce sales in the U.S. were $165.4 billion in 2010. As the retail market steadily grew—and eCommerce’s chunk of it grew at a far more significant pace—total eCommerce sales in the U.S. rose to $517.4 billion by the end of 2018. That’s 313 percent growth in revenue over the course of the decade.
Shopping holidays also became eCommerce tentpoles. On Black Friday 2010, U.S. shoppers spent $648 million online. On Black Friday 2019, U.S. shoppers spent $7.4 billion online. That’s an increase of 1,042 percent. On Cyber Monday 2010, U.S. shoppers spent $1.028 billion—the first billion dollar day in online shopping history. On Cyber Monday 2019, U.S. shoppers spent $9.4 billion, an 814 percent jump.
Singles Day in China had even more monumental growth over the decade. November 11, 2010 was the second Singles Day shopping holiday ever and saw $135 million in sales; on November 11, 2019, it did $38.3 billion. That’s a greater than 28,000 percent increase.
All this is to say: Yes, eCommerce had quite a decade of growth.
There’s a glaring “well, but…” takeaway from all of those numbers on the growth of the eCommerce market share: For all the talk of brick-and-mortar’s demise, it still maintains the lion’s share of retail spending.
Yes, U.S. eCommerce sales hit $517.4 billion in 2018—but in-store retail sales brought in $3.1 trillion. And that’s factoring out things like groceries and gas—so it’s an apples-to-apples comparison of things both retail stores and eCommerce shops sell like clothes, electronics, and the board game Apples to Apples.
Retail, despite the many eulogies, vacant storefronts, and eerily fascinating abandoned malls, is still maintaining a market share above 80 percent.
In fact, in the 2010s, online retailers recognized brick-and-mortar’s staying power—and took the “if you can’t beat ‘em, join ‘em” mentality.
Amazon, the top name in U.S. eCommerce, opened its first physical store in November 2015 after two decades of operating exclusively online. They now have two dozen or so stores—and bought Whole Foods Market in 2017 which gave them a significantly larger physical footprint. Thanks to their physical stores, Amazon not only has another revenue stream—they also have a place to showcase their growing line of electronics and gadgets (and AmazonBasics items), entice customers to sign up for Amazon Prime, handle package returns and pick-ups, and cultivate better relationships with customers.
Amazon isn’t the only online-first brand that expanded into physical locations this past decade. Brands like Glossier, Warby Parker, Away, Casper, Allbirds, The Black Tux, and many, many more opened their first physical stores in the 2010s. One study even found digitally native brands were on pace to open 850 stores by 2023. It’s now clear: Customers of digital-first brands still see a value in face-to-face shopping: trying things on, touching them, interacting with a salesperson, and building a different kind of relationship.
Brands like Walmart, Target, Best Buy, and Home Depot that already had established physical presences also found success this decade with “click and collect”—that is, order online and pick up in a store. It proved lucrative, too: Nearly three-quarters of customers who use click-and-collect make additional purchases once they’re in the store.
One of the top narratives coming out of BFCM this year was mobile shopping. Yes, mobile shopping has been trending up for some time—but the extent to which it impacted BFCM was still a surprise. Black Friday saw $2.9 billion in U.S. sales on mobile, for 39 percent of all revenue; on Cyber Monday, it was $3 billion for 32 percent of all revenue. (At Jilt, we saw an even bigger impact of mobile. Our Black Friday/Cyber Monday 2019 stats showed mobile orders accounting for more than half of all email-driven revenue.)
But mobile shopping didn’t exactly take off suddenly on January 1st, 2010. To put it in perspective, the smartphone with the largest market share in the U.S. in 2010 was… BlackBerry, at over 30 percent. I have no memory of ever making a purchase on my BlackBerry, just lots of memories of wonderful chats on BBM. (Kids, ask your parents.) In 2010, only one-third of mobile users in the U.S. had ever even downloaded an app.
In 2010, mobile shopping in the U.S. accounted for $2.2 billion in sales—roughly 1.3 percent of the $165.4 billion eCommerce market.
Mobile shopping crept up gradually—until sometime in 2017, when a switch seemingly flipped and we’d collectively hit a point where we were all finally comfortable shopping on our phones. A number of factors could be at play: Email and site designs became more mobile friendly, smartphone screens were larger, faster mobile internet speeds became standard, mobile wallets and other payment forms made shopping easier, our phones had finally achieved their goal of fusing to our bodies as new appendages. Whatever the reason, mobile shopping suddenly took a sharp turn upwards and began demonstrating hockey stick growth.
In 2017, 34.5 percent of eCommerce transactions in the U.S. were made on mobile phones. By the end of next year, it’s projected to be 53.9 percent. And mobile eCommerce sales in the U.S. this year are projected to be $267.5 billion—up from $2.2 billion when the decade started—and up from 1.3 percent of the eCommerce market to 44.7 percent this year.
But much like it was, and is, premature to declare the death of brick-and-mortar, it’s also premature to declare the death of shopping on computers. The average order value on desktop is still higher than that of mobile ($135.07 to $94.85).
Apple introduced the iPad in 2010 and, with it, gave us a “third” screen to stare at in addition to our computers and phones.
In those early days, the iPad also seemed like it might become a major player in the eCommerce space. After all, the mobile shopping experience wasn’t like it is now—screens were small and responsive design was in its nascent stages, so many retailers would offer mobile visitors a pared down version of their site that didn’t offer all the functions of their full site. The iPad, in contrast, had a larger screen that was far more accommodating to people looking for an online shopping experience that resembled what they were accustomed to on their computers.
In 2011, a report found that half of eCommerce mobile traffic in the U.S. was already coming from tablets. “The iPad will transform eCommerce,” one expert wrote. By the end of the decade, tablets had firmly settled into their lane (in my case, personally, a very expensive way to watch Netflix in bed and keep a toddler entertained on a long flight)—and it wasn’t to take over shopping. A study in February 2019 found tablets accounted for just 11 percent of eCommerce traffic. They now account for less than a quarter of all mobile sales in the U.S.—and that share is steadily dropping.
The iPad and tablets do, however, maintain a higher average order value than smartphones in the U.S. ($101.96 to $94.85) today. In spite of that accolade, they still have not proven to be the game changer some thought they had the potential to be at the beginning of the decade.
The eCommerce industry is top heavy. The top four online retailers own 61.5 of eCommerce sales in the U.S. as of March 2019 (Amazon, 47 percent; eBay, 6.1 percent; Walmart, 4.6 percent; Apple, 3.8 percent.) On a pessimistic note for the U.S. eCommerce industry, 80 percent of its growth in 2018 can be attributed to Amazon. eCommerce is a big market—but there’s just over one-third of it left for everyone besides those four titans in the U.S. (Other countries are seeing similar scenarios; in China, for instance, Alibaba, JD.com, Punduoduo, and Suning have more than four-fifths of the eCommerce market share.)
Amazon in particular had quite a decade. In 2010, Amazon’s U.S. revenue was $34.2 billion. In the last 12 months (ending September 30, 2019), Amazon’s U.S. revenue was $265.47 billion.
Fortunately, there’s still room in the eCommerce space for lots of others—and plenty of revenue for them as well. Over the course of the 2010s, small, medium, and large-but-not-Amazon-large competitors made their moves to capture their piece of the market.
Perhaps the best way to illustrate that rise is by looking at the growth of two of the most popular platforms for eCommerce retailers: Shopify and WooCommerce.
Shopify launched in 2006 and by 2010, they were doing respectable business as a platform. In 2010, Shopify had approximately 21,000 stores that did a total of $124 million in revenue worldwide. Fast-forward to the end of 2018 and Shopify had 820,000 stores (up 3,804 percent from 2010) doing $41.1 billion in sales (up 33,045 percent from 2010) worldwide.
Shopify is also on pace to end the decade as number two in aggregate U.S. sales volume, behind only Amazon. So yes, the top four online retailers own nearly two-thirds of U.S. eCommerce sales—but collectively, the U.S. merchants on Shopify would make it into that group. (Note: Shopify does not break down its sales volume by country, so we do not have any specifics beyond that.)
As for WooCommerce, we can’t look at their sales volume in 2010 because… well, they didn’t exist. WooCommerce launched in September 2011 and, in the span of less than a decade, is now the most popular eCommerce platform on the internet. It’s used by 3.3 million websites and powers more than a quarter of all online stores. According to the latest available estimates, those stores brought in more than $10 billion in sales worldwide (in 2017).
Grabbing some of the eCommerce market share involves figuring out creative ways to sell to customers. New online retails business models sprang up regularly over the 2010s and many found a strong market foothold. Here are three of the most notable ones.
- Subscription boxes. Birchbox launched in 2010, and is regularly credited with kicking off the subscription box craze. (It’s now sixth-most popular in the U.S., behind Dollar Shave Club, Ipsy, Blue Apron, BarkBox, and HelloFresh.) From 2014 to 2018, the subscription box market grew 890 percent. A 2019 survey found 54 percent of online shoppers get at least one subscription box.
- Software as a service. Full disclosure: Jilt uses the SaaS model, so obviously we have a horse in this race. The SaaS market had quite a decade. In 2010, SaaS companies did an estimated $24.65 billion—in 2019, that was up to $214.3 billion. Even the biggest software companies like Microsoft and Adobe went the SaaS route over the course of the 2010s. SaaS revenue isn’t usually counted among eCommerce numbers, but the rise of SaaS has fundamentally changed how software is sold. Instead of shipping customers applications on physical storage, like DVDs, or selling one-time downloads (two models that are still routinely accounted for in eCommerce data), with the SaaS model, customers pay a monthly fee and software is continuously updated on a hosted server.
- Direct-to-consumer. The direct-to-consumer model isn’t new; brands like Dell and Eddie Bauer have been employing it for decades. But over the 2010s, DTC became viable for smaller companies and startups; technological advances and cost reductions allowed brands to bring everything from sourcing to production to sales to shipping under one roof. As of January, there were around 400 DTC brands operating eCommerce shops in the U.S.—and of the digitally native brands, 97 percent are making more than $1 million in annual revenue.
While those three eCommerce innovations stand out, none was the toast of the internet when the 2010s began. No, that distinction went to… Groupon. In 2010, Groupon was flying so high that they rejected Google’s acquisition offer of $6 billion. An article about the state of the eCommerce industry in March 2011 quoted an expert saying, “Two major trends that will fuel online buying growth are mobile commerce and daily deal sites like Groupon. Both opportunities are expected to have strong sales growth over the next five years.” Groupon would plummet by 2013, as merchants realized the massive discounts they needed to offer on their Groupons didn’t lead to customer retention—but could lead to the death of their businesses. All this is to say—not every trend that pops up during a decade has the staying power to last, especially if it’s built on a model that’s economically unsustainable.
Shopify published an article earlier this year looking at the future of eCommerce and addressed social this way:
By every big-picture metric, social media and eCommerce should be a match made in heaven. Worldwide penetration, active accounts, time spent, and ad spend are up across the board.
But, there’s a disconnect. In terms of sources that influence purchase decisions, social media lands last and was rated less than half as effective as reviews … every major report reveals the same thing: social users aren’t buying.
Two-thirds of people surveyed between 2017 and 2018 said they’d never made a purchase from social media. While social advertising is effective, the marriage of organic social media reach and eCommerce never quite came together over the decade like it seemed they would. (And that’s the case even though this is the decade that made “social media influencer” a viable and even sought-after career.)
Twitter launched a “Buy” button in 2014 to build eCommerce into its app—but discontinued it in 2017 to focus on brands buying ads to drive sales instead. Facebook launched and killed a buy button as well. Instagram Shopping shows some promise as a driver of eCommerce purchases—but it’s relatively new and still finding its lane.
Facebook’s decisions over the decade also caused difficulty for eCommerce brands—primarily their decision to all but kill organic reach and, essentially, make brands pay to reach their own fans. Facebook’s false metrics led brands to pivot to video content—under the erroneous assumption that’s what people wanted. And as Facebook’s aggressive personal data collection (and their fast and loose protection of that data) became more common knowledge in the wake of the 2016 U.S. presidential election, users started fleeing—especially younger users.
That being said, it hasn’t all been bad news for social media and eCommerce—it’s just that the 2010s didn’t fully bear out a way for the two entities to work together. Brands brought in $6.5 billion in eCommerce sales from social media in 2017—which is good, but far below where most would’ve projected it to be. As of late, social referrals have grown 110 percent in the past two years—but only to about nine percent of all total referrals. In April, a survey found more than half of Instagram users had made a purchase right after they saw a product on Instagram—and 87 percent had taken some kind of action after seeing a product, like researching it or recommending it.
Social media isn’t going away. eCommerce isn’t going away. Sometime in the 2020s, brands are going to figure out how these two entities are going to work together. (A not-so-bold prediction we can check on in 10 years.)
While the eCommerce industry struggled with social media in the 2010s, there was no such issue with email.
In this article, we’ve discussed some significant institutions that were prematurely declared dead in brick-and-mortar retail and desktop eCommerce shopping. Email deserves a spot on the list as well. It was declared dead as early as 2002 but presses on—and now, despite all of the other communication channels that have sprung up, continues to thrive and grow.
In January 2019, the Wall Street Journal called it the “only guaranteed-delivery option the internet has left.” And, when done right, it’s proven to be the most effective form of marketing a business can use. Marketers now rank email marketing as their most effective digital media channel, ahead of social media marketing, SEO, social advertising, content marketing, direct mail, affiliate marketing, search advertising, and display advertising.
Plus—perhaps surprisingly—it’s proven to be popular with younger generations. Millennials spend more time checking email than any other group. Email use is growing for Gen Z, with a projected 48 percent increase in usage from 2017 to 2022. It’s also the most popular activity on smartphones.
It’s not that marketers didn’t recognize the power of email marketing in 2010—it’s that they weren’t sure it would sustain that power. A survey in 2010 found 71 percent of marketers were worried about email struggling to compete with social media. (PDF) (Although 47 percent believed social might help them grow their email lists.) In a cautionary measure, only a tepid 39 percent of the eCommerce industry increased its email budget from the prior year.
But… marketers were also starting to figure out the techniques that would help email marketing grow and thrive through the decade. Two-thirds recognized the need for segmentation. One-third had started experimenting with automations. And less than 10 percent were relying on purchasing email lists and were, instead, recognizing the value of growing their own lists. (PDF)
Innovations helped the email marketing industry grow as well. Abandoned cart recovery emails finally gained widespread implementation in the 2010s. Exit-intent technology arrived in 2012 as a new way to acquire email subscribers. Google more or less forced websites to use responsive design in 2015, announcing they’d penalize sites in search rankings if they weren’t mobile-friendly; so responsively designed emails that looked good on mobile now took customers to responsively designed websites that did as well. The arrival of GDPR, through an optimistic lens, continued to elevate the email marketing industry and ensure permission-based marketing was standardized. And services, like (may we say) Jilt, tailored email marketing specifically to eCommerce stores, opening the door for more targeted, personalized, and segmented emails tied more closely to the products in the store.
As a result, by the end of the decade, email marketing accounted for right around 20 percent of eCommerce transactions—just barely trailing organic traffic and paid search ads. And email conversion rates continue to reliably climb year after year.
The 2010s were a decade that saw major growth in the eCommerce industry—from 7.2 percent of retail U.S. sales worth $165.4 billion up to 16 percent worth $517.4 billion. Worldwide, email also saw a 504 percent growth in sales. And along with that massive growth, eCommerce evolved and changed over the decade.
- Digital businesses go physical. Brick-and-mortar isn’t dead; its retail market share is still above 80 percent. So over the 2010s, many digital brands went physical and established their own retail stores. Click and collect also became a popular method of sales—order online, pick up in store.
- Mobile shopping erupts. Mobile shopping grew gradually through the 2010s—then began exploding near the end. It’s now projected to account for more than half of sales by the end of next year.
- Tablets show promise but don’t revolutionize eCommerce. The iPad came out in 2010 and initially looked like it might be the next big thing in eCommerce. But over the decade, phones eventually overtook tablets for mobile commerce. Tablets now account for less than a quarter of mobile sales in the U.S.—and dropping.
- eCommerce giants dominate, but there’s room for others. There’s a lot of money in eCommerce, but the top four retailers in the U.S. are claiming almost two-thirds of it. Other markets worldwide are seeing similar splits. That being said, there’s still plenty of room for smaller eCommerce businesses—as demonstrated by the incredible growth of Shopify and WooCommerce over the decade.
- Brands innovate to sell online. Sales models like subscription boxes, software as a service, and direct-to-consumer took off in the 2010s as brands found new ways to sell to customers.
- Social media and eCommerce never quite figure it out. While social media seems like a natural fit for eCommerce, social-driven sales are still not anywhere close to what they should be.
- Email marketing is the most effective form of marketing. Even though email isn’t a new technology, it was the most effective form of marketing in the 2010s—and innovations helped it grow even more.