The effects of massive unemployment around the globe is about to impact pure players and retailers as consumer incomes get tighter and households narrow spending to just the essentials.

We’re also seeing a lot of fluctuations in performance as spikes in new COVID-19 cases force retailers to close up shop again. In the US alone, the resurgence of infection has caught state governments in a precarious position: Do they comply with lockdown mandates in the interest of public health, or do they defy mandates in the hopes that this will bring in more foot traffic and get their employees back to work? 

Welcome to the CCInsight project where we track how COVID-19 impacts consumer spending around the world. Here are some of the top e-commerce trends we’ve spotted over the past seven days.

US Retailers Struggle to Keep Profitability Up While Consumers Spend Less

In recent weeks, the average order value (AOV) from US online purchases dropped to its lowest level since the pandemic began. This puts American retailers in a tough spot as they try to balance restocking inventory and profitability.

The AOV for online purchases in the US shrank by 23% year-over-year by mid-July — the worst decline of this consumer confidence metric since the beginning of January:

Us Retail Online Aov Since Jan 1024x514 1
Average Order Value decline in the US since January (CCInsight data).

Alex Timlin, senior vice president of verticals at Emarsys, explains: “US retailers have a tough choice right now. Either they discount products en masse to shift them, which directly affects profitability, or they keep their stock until this time next year, which means missing out on potential sales in the short term and having out-of-date stock next year.”

“Many retailers are opting for the latter option because of the costs involved with online retail. Retailers make most of their profit from shifting stock in-store, whether it’s through consumers shopping in person or using click-and-collect online. However, the majority of online retail often involves a complex supply chain of distribution centers and delivery networks covering thousands of square miles, which means selling to consumers online can be up to 90% more expensive. This situation makes discounting online very difficult, and so brands are left with no choice but to hold on to stock for now.”

The decline in AOV coincides with new reports that retail bounced back from the end of May to finish at +7.5% for the month of June, though down from the average +18.2% for the entire month of May.

Chile and Spain Spotlight: Pure Play vs. Retail E-Commerce

Chile and Spain speak the same language and they’re both in the top ten countries most impacted by the pandemic, but e-commerce is very different in each country.

Last week, Chile surged past Spain to become the 6th worst-hit country by the pandemic. While Chilean retail has been devastated, pure e-commerce has performed well, despite civil unrest, rising unemployment, and a pre-pandemic recession. The Chilean central bank forecasts that 2020’s GDP will be the worst in 35 years.

As we’ve seen in just about every country, a rise in new cases immediately impacts retail. The flip side is that spikes can also boost e-commerce (as it did in Chile but not in Spain). 

Chile And Spain Pure E Commerce Revenue Since January 1024x519 1
Chile and Spain pure e-commerce revenue since January 2020 (CCInsight data).

Chile’s pure e-commerce is performing far better than retail online, but the exact opposite is true in Spain, making the country’s retailers more hopeful than other European countries about recovering. However, many analysts predict that the COVID-19 recovery will be harder on retailers than the Great Recession of 2008.

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Spain’s retail online revenue growth since January (CCInsight data).

While pure play is on a steady decline, retail e-commerce in Spain is positive, staying above 0% since early April. But now after months of the pandemic, CCInsight data shows that Spaniards would rather buy online from a retailer they know and trust rather than a pure e-commerce brand. 

Europe May Recover Better than the Americas and APAC

With the Americas impacted by rises in new COVID-19 cases, Europe may recover better than analysts previously expected.

Europe Retail Online Revenue Since Jan 1024x523 1
Europe retail online revenue since January (CCInsight data).

Retail first began to rebound back in May, and as stores have reopened, consumers have been purchasing goods and services in bigger numbers than forecasted. This could be a game-changer for European retailers who can drive their new e-commerce customers into brick-and-mortar stores.

Data Insights for the Week

The Americas

The same three countries (Argentina, Chile, and Puerto Rico) dominate pure e-commerce orders growth in the Americas, though the US is seeing significant growth as well. Retail online this week is similar to pure play with the same top three countries and a good showing from the US.

Orders Increase Leaders at a Glance

Americas Orders Leaders 7 17 20
Top 5 Orders Increase Leaders in Europe (week beginning July 13, 2020).

Asia Pacific

APAC is way down this week in orders growth. For both pure play and retail e-commerce, the clear leaders are Australia and Thailand, but much of the region is experiencing growth declines.

Orders Increase Leaders at a Glance

Apac Orders Leaders 7 17 20
Top 5 Orders Increase Leaders in the Asia-Pacific region (week beginning July 13, 2020).

Top Product Trends of This Week

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Product trends (week beginning July 13, 2020).

Key Product Trend Insights: Washing machines are the highest performers this week, followed by home improvement tools and exercise equipment.

Growth Rate of Online Transactions

E-commerce continues to see year-over-year growth, and it depends on the region whether pure play or retail e-commerce is performing the best. Countries are still suffering from rises in new COVID-19 cases as well as local lockdown or reopening policies.

Following are the growth trends we see this week, but you can explore Regional and Countries trends in more depth.

Trends by Region

Pure e-commerce: Pure e-commerce orders growth YoY overall is strongest in the Americas, followed by Europe, and then APAC which has fallen over the past month. 

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Pure e-commerce trends by region (week beginning July 13, 2020).

Retail online: Though the Americas are the top retail e-commerce leaders overall, the top five in Europe are beating the top five in the Americas. APAC started to rise in early July, but for the most part, the region is not doing well.

Regional Retail Online 7 17 20 1024x519 1
Retail online trends by region (week beginning July 13, 2020).

Trends by Country

Pure e-commerce: Stability is on the rise in the Americas, with fewer drastic changes over the last four weeks. Argentina (in the top three for two months now), Chile, and Puerto Rico lead the region with over 200% YoY orders growth.

The United States (+133% YoY, -5% in the last month) and the Dominican Republic (+122% YoY, -25% in the last month) are enjoying huge growth in June and July, with Mexico (+81%YoY, +7% in the last month), Colombia (+64% YoY, +11% in the last month), Peru (+63% YoY, -34% in the last month), and Canada (+31% YoY, +6% in the last month) steadily maintaining positive growth.

Countries Americas Pure E Com 7 17 20 1024x504 1
Pure e-commerce trends by country (the Americas) (week beginning July 13, 2020).

Though down from four weeks ago, pure e-commerce in Europe is the best-performing region overall. Out of the countries CCInsight follows, 20 have posted positive YoY growth in orders this week, with nine countries falling below 0% YoY. The average rate of YoY increase is +31%, while the average rate of decline is -12% YoY.

Belarus remains on top at +108% orders growth YoY, down only 3% in the last month. The fastest riser (up 31% in the same time frame) is Sweden sitting at +98% orders growth YoY, but we’re seeing good growth for Germany (+51% YoY, +3% in the last four weeks), Poland (+46%, +101% in the last month), the United Kingdom (+26%, -13% in the last month), and Russia+24% (-37% in the last month). 

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Pure e-commerce trends by country (Europe) (week beginning July 13, 2020).

Out of the 12 countries we’re tracking in APAC pure-play orders growth, only five have positive growth this week. The giants are in deep decline with India falling 135% in the last four weeks to finish the week at -21% YoY, and China is down -77% YoY.

But the top four countries are seeing increases in orders, with Thailand at +90% YoY (+58% in the last four weeks), Australia at +89% (+31% in the last month), Japan at +55% (down 25% in the last month after hitting 80%), and South Korea at +17%.

Countries Apac Pure E Com 7 17 20 1024x514 1
Pure e-commerce trends by country (APAC) (week beginning July 13, 2020).

Retail online: In the Americas, Ecuador and Peru have over 200% YoY orders growth with little variation in the last four weeks. The next closest countries are all seeing extraordinary increases in orders with Mexico at +165% YoY (though falling 35% in the last month), Colombia at +120% YoY (-10% in the last month), the United States at +117% YoY (+7% in the last month), and Canada at +86% (+2% in the last month).

Countries Americas Retail Online 7 17 20 1024x517 1
Retail online trends by country (the Americas) (week beginning July 13, 2020).

Most countries have positive orders growth YoY in retail e-commerce in Europe. Belgium and Poland have both remained above +200% for over four weeks now, and this week, the United Kingdom joined them with +27% growth in the last month. Not far behind the top three is Spain with +166% YoY (down 34% in the last month) and Turkey with +139% (down -21% in the last month). 

Bellwether countries Germany and France have both fallen in the last month, though Germany (+13% YoY, -5% in the last month) is doing better than France (-1% YoY, -28% in the last month) this week. 

Countries Europe Retail Online 7 17 20 1024x522 1
Retail online trends by country (Europe) (week beginning July 13, 2020).

Only three countries have positive retail online orders growth in APAC this week: Australia leads far and away with +99% (+42% in the last month, completely erasing a decline in late May), quite a bit ahead of Thailand with a strong +39% (+63% in the last four weeks, also recovering from losses at the end of May) and New Zealand with +15% (-21% in the last month, changing places with Japan). Japan dropped 36% in the same time to finish the week at -0.88%. India’s the worst off at -58%, and even China remains down at -22%.

Countries Apac Retail Online 7 17 20 1024x518 1
Retail online trends by country (APAC) (week beginning July 13, 2020).