GroupM predicts e-commerce sales to hit $3.9 trillion by 2024

E-commerce spending will soar to $3.9 trillion in 2020, or 17% of global retail sales, according to GroupM’s first-ever e-commerce forecast. By 2024, e-commerce sales will reach $7 trillion annually and contribute 25% of retail sales, according to GroupM.

In global markets, consumers are moving away from shopping in physical stores and spending online from the comfort of their homes, largely thanks to the pandemic. This has made e-commerce “the number one problem” for marketers because that’s where “all the growth is,” said Brian Wieser, global head of business intelligence at GroupM.

Retail media networks are particularly poised to take advantage of the e-commerce boom. Amazon, the third-largest digital media seller behind Google and Facebook, is thriving in these changing conditions, while major retailers including Walmart and Target are doubling down on their own retail media networks to capitalize on the growing space.

“There’s so much more inventory from an advertising perspective,” Wieser said.

But e-commerce isn’t just a direct response opportunity. It also has brand-building potential, GroupM Global CEO Christian Juhl said in a statement.

“There is a huge opportunity in e-commerce for brand building, linking customers’ online operations to their media activations across all channels,” he said. “The pandemic has accelerated this need and shown customers just how valuable e-commerce truly is for brand building.”

Social media has become an increasingly important investment channel for marketers looking to build their brands online to drive online sales. Instagram’s investment in e-commerce functionality on Reels and TikTok’s merger with Shopify are just two recent examples of how social media is becoming an integral part of online shopping.

“Anything a marketer does to build their brand, whether using social media or other [paid media channels], will almost certainly lead to better e-commerce performance,” Wieser said.

However, not all categories are benefiting from the rise of e-commerce. Automakers, for example, must overcome an ingrained car-buying process and experience that involves visiting dealerships to test drive a big-ticket item before buying it.

“Cars are typically sold based on brand preferences formed over years, even decades,” Wieser added, noting that consumers typically want to “get in a car” before making a purchase.

Automakers have tried to adapt to dealership closings during the pandemic by spending on digital media and performance marketing to drive virtual showroom visits. But they may have done so at the expense of building their brands, Wieser said.

“Automotives have been trying quite aggressively to become more performance-driven rather than brand-driven,” Wieser said. “It probably wasn’t the best thing in the long run.”

Looking at markets by market, e-commerce growth differs significantly from country to country, in part because different countries do not include the same sectors in their e-commerce figures. Some markets have included catering and delivery services in their figures, for example, while others have not. Final figures exclude catering and delivery services to avoid skewing results between different markets.

“We standardized the definitions in the data and then made estimates to standardize them across countries,” he said. “The magnitude of the difference was startling.”