Ecommerce Adoption Continues. And Continues. And Continues.
The COVID-19 global e-commerce surge was initially born out of necessity. Online shopping provided a practical alternative as retail locations closed and people stayed in to avoid the virus. In fact, global e-commerce rose from 15% of total retail sales in 2019 to 21% in 2021. It now sits at an estimated 22% of sales. But as consumers began shopping in person again, investors started to ask: Was the Covid-bump a one-and-done deal, or could e-commerce growth continue? Wholesale liquidators and buyers of closeouts are doing more business online as ecommerce continues to grow. Many importers are find that getting rid of stock can be done by advertising online to closeout websites and closeout brokers. Overstock inventory is one of the biggest problems importers face today, especially if they are trying to close a 3PL warehouse or downsize to a smaller warehouse.
Over the long term, the e-commerce market has plenty of room to grow and could increase from $3.3 trillion today to $5.4 trillion in 2026. “The Covid-driven bump will not flatten future e-commerce growth,” says Brian Nowak, an equity analyst covering the U.S. internet industry. He sees e-commerce reaching 27% of retail sales by 2026. “Across the world, we have yet to see a ceiling for e-commerce penetration.” Wholesale liquidators help companies reduce inventory if they are getting rid of old stock selling surplus or discontinued inventory, or disposing of overstock inventory and closeouts.
Many factors are driving growth, including logistics, mobile device ownership and marketplace expansion. For investors, this means the e-commerce boom will likely continue, offering opportunities for gains across multiple businesses, regions and verticals—and at a time when recent stock valuations don’t necessarily reflect that growth. Closeout websites selling overstock inventory have done especially well post-pandemic and it appears their growth trend may continue allowing them to sell more and more closeouts.
The growth of digital commerce represents a permanent change in how people shop. In fact, Morgan Stanley’s industry model, along with other data, suggests that e-commerce will continue to gain traction, even in countries where online shopping is already popular. As an example, if a closeout company is getting rid of stock to make more room in their warehouse, they can reach a much bigger market online that if they only contact their existing brick and mortar stores. It is important to liquidate inventory that has been sitting in the warehouse collecting dust because the space is needed for new products coming in. Old inventory or slow selling inventory must be disposed of to make room for new goods and generate cash.
In South Korea, thanks to a well-developed payments and logistics infrastructure, online sales already account for 37% of all retail activity. But the growth there isn’t done. E-commerce in South Korea could increase to 45% in the next five years, driven by food delivery and same-day options. Likewise, in the U.S. e-commerce could reach 31% of sales by 2026, up from 23% now, as brick-and-mortar stores close and consumers prioritize convenience. If you have a warehouse filled with dead inventory and you are getting rid of old stock you can search online for wholesale liquidators using search terms like these: closeouts, closeout brokers, overstock buyers, closeout brokers, sell old inventory, buying closeouts. Any of the search terms will provide leads that can help you clear your stock.
“While the rise of e-commerce during the first year of Covid-19 in 2020 is easily explained, the fact that growth persisted in 2021 is evidence of a real behavioral shift to shopping online. Behind the scenes, improvements in everything from digital payments to supply chain and fulfillment capabilities improve the customer experience—further driving changes in consumer behavior. Shopping for closeouts online is much easier than having to visit retail stores, and often customers can buy liquidations and have products delivered the same or next day.
“One of the top differentiating factors for e-commerce platforms could be supply chain and fulfillment capabilities, which could empower better customer servicing,” says Gary Yu, who covers telecom and internet stocks in China, where grocery delivery is growing faster than China e-commerce overall.
Internet use and increased connectivity are also significant drivers, particularly in emerging markets, where populations skew younger and spend more time online than their counterparts in developed markets. Consumers in Colombia and Brazil, for instance, spend more than five hours online each day, on average, creating a significant opportunity for retailers to reach a new market of customers. Although there has been much grown in brick and mortar closeout and liquidation outlets in South America, having an online presence like closeout websites is invaluable.
In 2019, before COVID-19 and lockdowns forced the rapid expansion of the ecommerce world, ecommerce was valued at $3.4 trillion globally. Insider Intelligence anticipated that ecommerce sales would be up by 12.8% year-over-year, but they increased by 25.7% in 2020—and are poised to hit $7.4 trillion by 2025, over twice the value of the 2019 ecommerce market. Closeout buyers are specialists in handling excess inventory so importers don't get stuck with dead stock in their warehouse. Overstock buyers or liquidation companies are basically the same thing, and they both sell dead stock and are buyers for entire inventory.
With the continued growth of ecommerce, Insider Intelligence forecasts it will make up 24.5% of all retail sales worldwide by 2025, up from 19.6% in 2021. The US market is generally on track to meet that mark as well, with ecommerce sales predicted to hit 23.6% of total retail sales that year, up from 11.0% in 2019. Of everything you can purchase online, entertainment (books, music, and movies) is the category with the largest majority of online versus in-store revenue. Nearly 70% of entertainment purchases are made online, with the next highest category being electronics and computers at 53%. The supply chain disruptions from Covid-19 created a large backup of inventory in the U.S. And thousands of containers were delivered later than expected. As a result major retailers canceled orders and left importers with huge amounts of excess inventory they need to get rid of. Excess inventory buyers can help by absorbing some of this overstock and selling it to closeout wholesalers and closeout distributors.
Even though stores are opening back up and people are eager to resume their lives, one thing that most Americans don’t want to change after the pandemic is their shopping habits. In fact, in a new report from ShipStation, nearly three-quarters of Americans say their preference is to continue to shop online even after the pandemic ends. Some habits just aren’t going to break as we enter into the “new normal.” While impulse shopping is certainly a part of the ecommerce industry, 63% of shoppers say that they do research online when making major purchases. Online shopping is important for larger purchases because people can price compare and see lots of options without committing. For example, Statista that consumer electronics and household appliances were highly searched shopping terms. However, people still tend to make their final purchases in-store for these products. When buying closeout housewares or closeouts on home décor and large appliances most customers research online.
Merchandise USA is a wholesale liquidator in business more than 38 years. We buy and sell excess inventory of housewares, toys, sporting goods and overstock lawn and garden products. We sell liquidation stock to closeout websites, closeout distributors and closeout warehouses. We are buyers for liquidation inventory due to warehouse closures or moving to smaller warehouse.
