Digital commerce vendors will face major disruption in 2020

Global spending on digital commerce will fall by 14% in 2020 as coronavirus lockdowns and reductions in consumer spend hit hard, according to Juniper Research.

Spending will decline from $11.2 trillion in 2019 to $9.7 trillion.

The digital ticketing area is particularly at risk, given the effect of widespread lockdowns on transport usage and events. Airline ticketing will struggle to recover fully over the next five years, as airlines face unprecedented cashflow challenges which are set to reshape the face of the industry.

Digital commerce spend will recover in 2021, exceeding 2019’s spend levels by 4%. The economic disruption from the coronavirus will last well into 2021, but digital services are better placed than offline commerce for recovery, as there has been considerable migration from offline spend to online during the pandemic.

As a result of enforced changes during recent weeks, such as using contactless payments instead of cash, or buying groceries online, there will be an overhaul of consumer behaviour, resulting in much greater use of digital services, which will bolster growth in digital commerce spend over the next five years.

Juniper Research also forecasts that payments for the likes of digital games or video subscription services will continue to increase during the outbreak, as users on lockdown use digital services more extensively.

Juniper Research’s Nick Maynard comments: “Digital commerce vendors will face disruption in 2020, but the shift of spend from offline to online channels presents a crucial opportunity for the market. Vendors must act to build on increased digitisation of services during the pandemic to sustain future growth”.