$1 Trillion of eCommerce, Hand Payments, Growth Opportunities
eCommerce growth is likely to continue to far outpace overall consumer growth over the next several years, although it will likely moderate to some degree from current levels. More nascent categories like food, CPG, and home improvement are expected to help support digital growth over the next five years. This will likely come at the expense of brick and mortar sales, as we expect overall retail growth to remain in the ~3% range. Over the next five years, we anticipate online sales will nearly double to over $1 trillion. Our research indicates that the US consumer has remained relatively strong throughout 2019 and is optimistic for 2020, however, a major recession, significant geopolitical conflict, or escalation of the trade war could represent risks to our retail forecasts. A full breakdown of our five year eCommerce growth expectations can be found in this excel file.
Amazon Plans to Link Credit Cards to Hands
The WSJ reported this week that Amazon is creating checkout terminals for brick and mortar stores that would allow shoppers to link their credit card information to their palms without the need for a card or phone. The article notes that retailers are skeptical about adding Amazon powered payment systems in stores, thereby reminding shoppers about the eTailer at the point of purchase. Amazon could also introduce these terminals at Whole Foods locations or at the newer grocery locations that are rumored to be opening in 2020.
Amazon is expected to be the largest dollar growth opportunity in 2020
While working with Amazon can be a challenging experience, the eTailer continues to stay top of mind because of the large growth opportunity that still exists on the platform. Despite its already huge base of eCommerce business, we continue to forecast above average growth for Amazon in 2020 (+20% Y/Y in US GMV vs. US eCommerce market +18%). Amazon’s continued focus on growing topline at the expense of profit, strength in new Prime members, and its growing importance on the path to purchase are all important contributors to its growth prospects. As a result, during our recent LiveCast, more than half of manufacturers expect Amazon to represent the largest dollar growth for their eCommerce business in 2020. In terms of Walmart.com, many manufacturers on our council have high expectations for continued growth with its online grocery platform during 2020, following its success over the last two years.
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