E-commerce 2020: Services Slump but Online and Insurance On the Up

  • 17/12/2020  |
E-commerce 2020: Services Slump but Online and Insurance On the Up

This year has been an unprecedented year, and its effects on the economy have been just as unprecedented as those it has had on every other aspect of our lives. The findings of the Politecnico di Milano’s 2020 eCommerce B2c Observatory – now in its twenty-first edition – reveal some interesting trends and point to what the future may hold.

Over the last nine months, lockdowns, government restrictions, altered consumption habits and a sudden acceleration in the growth of e-commerce have all contributed to triggering radical changes, some of which unsurprising, others less so.

Despite unprecedented growth in the field of online product purchasing, which over the last twelve months has risen by 31% for a value of over 5 billion euros, the crisis affecting the services sector has contributed to a 3% overall fall in online purchases. A year ago, nobody could have imagined that a then-booming services sector would soon be witnessing the drop of 47% in revenue which it has endured this year.

One sector which has displayed heartening growth over the period of the pandemic, however, has been insurance, with online purchases from insurance companies rising by 6%, perhaps because, as worries about health, income and business interruption have grown, the Covid-19 Pandemic has not only raised awareness of the benefits of e- commerce but has also provided a timely reminder of the benefits of protection. Moreover, the insurance industry has been taking steps to accelerate its digitalization efforts, especially this year, and this is both due to the fact the Big Techs themselves are beginning to make their presence felt in the industry and to the great innovation pushed by the pandemic.

According to Alessandro Perego, the scientific director of the Politecnico di Milano’s Digital Innovation Observatory, the overall dynamics displayed by the main macro categories of the e-commerce market display radically divergent trends on a global level, with services like events, tourism and transport suffering enormously due to the closure of borders and restrictions on movement and gatherings while at the same time other sectors have been benefitting from the vast numbers of new customers who have turned to online channels for their purchasing needs.

The three sectors which have made the greatest contribution to growth are food and grocery, which has risen by 1.1 billion euros, IT and consumer electronics (up by a billion euros) and, perhaps surprisingly given the reduced opportunities for social interaction, clothing, which has risen by 700 million euros. Online product purchases worldwide for 2020 are forecast to reach a total of 2,600 billion euros, representing a rise of 16% over figures for 2019.

“As we are all very well aware, the Covid-19 situation has generated an unprecedented digital evolution in Italian lifestyles which is also having profound effects on purchasing behaviours,” says Roberto Liscia, president of Netcomm, the Italian E-commerce consortium which collaborates on the Observatory with the Politecnico di Milano’s management school. “Today’s customer journey is deeply affected by the ‘new normal’ in which we are now living.”

One important aspect of this ‘new normal’ has been the shift over to home delivery, which is now the preferred method for receiving products of 93% of users. At the same time, cash transactions have been losing ground to digital payments. Although the digitization that Italian consumers are increasingly demanding from Italian companies still lags behind the European average, experts are optimistic that the current situation will speed up the process of bridging the gap.

Related Posts