Four Year Leap; eBay GMV; Amazon Earnings

The COVID-19 crisis has led to an enormous mix shift towards digital. Based on our benchmark results, manufacturers expect eCommerce to reach 21% of their U.S. retail sales in 2021, up from 15% seen in 2019. These results are consistent across essential and non-essential categories and this amounts to four-plus years of mix shift compared to the trajectory the US was in pre-crisis, making 2021 now look like what 2025 was expected to look like pre-crisis. This should lead to a major re-evaluation of personnel, technology, and capabilities investments to support the business coming out of the crisis.  

eBay Sees Improved 1Q GMV
Last night, eBay reported its 1Q20 results, including GMV growth returning to flat for the first time in several quarters (was down 4% Y/Y in 4Q19). Some of this strength was due to benefits from COVID-19, with management noting that since mid-March they saw strength in traffic, buyer acquisition, conversion, sold items, and GMV, and that this strength continued into April. Management did not give much commentary on their outlook, choosing not to update annual guidance and noting that it is difficult to predict what may result as shelter-in-place guidelines are eased and how global consumer demand and seller inventory may evolve over time.  

Amazon Earnings Likely to Show Strong Y/Y Growth
Amazon will report its first quarter earnings this evening and will provide details on how sales have performed to start the year through the COVID-19 crisis. We expect that sales will likely continue the strong growth that they saw in 2H19, as consumers shifted dramatically towards eCommerce and away from in-store shopping. We will also be listening intently for Amazon’s commentary on 2Q and the rest of the year given the uncertainty surrounding the global economy. 

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