Amid the coronavirus 'e-commerce saw 10 years worth of growth since March'

Michele Romanow Clearbanc Co-Founder & President, joined Yahoo Finance to discuss the impact of covid-19 on e-commerce.

Video Transcript

ADAM SHAPIRO: Michele Romanow is the Clearbanc co-founder. She is joining us from Toronto, Canada. Good to see you again. It's really-- I guess, it's to be expected, as we all have started, or eight months ago, nine months ago, buying online in ways we hadn't before. There's really nothing that's going to stop this juggernaut. Is there a point? Is it too soon to say when e-commerce may actually surpass brick and mortar? It's still-- there's still quite a gap to close.

MICHELE ROMANOW: Yeah, so, you know, if you zoom out and look at where we are today, I mean, e-commerce sales, the percentage of retail sales went from 14% of retail sales at the beginning of COVID to almost 30% today. So there is that path where we could completely see this getting to half of retail sales. As we've gone back into lockdown, we've seen this. And I think what's really interesting, on this Black Friday, we actually saw a lot of small businesses win for the first time.

So, you know, Clearbanc's the largest e-commerce investor. We have 20,000 companies connected in-- to us. And when we look at the companies that are doing less than 30k, so really, those are these new early small businesses, those this Black Friday were up about 150%. So I think that's really good news, is this message about shopping local, but just doing it online is really getting out there.

SEANA SMITH: Michele, when we talk about accelerating trends here, we talked about the time and time again, not only with retail, but really, across all sectors when it comes to COVID and the changes that it has prompted over just 10 months, how-- when you talk about 14% of e-commerce sales accounted for all of retail back in March, now it's close to 30%, how quickly did we grow? I mean, was that something that would have taken three years, five years? Did we see 10 years of growth in just 10 months?

MICHELE ROMANOW: We saw 10 years of growth. Internally, as a team, we're talking about we're not in e-commerce 2020. We are in e-commerce 2030 right now. Because this was very slow. People were changing consumer behaviors very slowly. Think about folks like my mother who were scared to buy their groceries online because the blueberries would be crushed. Well, COVID came, and she bought her blueberries online. They were just fine. And, you know, she changed a shopping habit permanently.

And so, I think that's why we're going to see a lot of these secular changes, as we've gotten more comfortable with the categories that we wanted online. We also saw new categories open up that I thought were surprising. I mean, the big ones that were up in our portfolio-- no surprise here-- medical supplies, collectibles. People were looking for nostalgia and hobbies. And then the last one that really surged this year was CBD.

ADAM SHAPIRO: CBD, we're debating in the United States whether we want to legalize marijuana. There could be a vote in the House on that this week. But I want to get back to this growth because you talked about the monthly revenues. And Clearbanc, you truly saw some incredible growth. Give us some of the numbers. And even though we're not going to go backwards, that kind of growth, it's not really sustainable once we really do get out of the pandemic, or is it?

MICHELE ROMANOW: You know, it is really hard to see. I think that we've actually changed a lot of these patterns. I don't think we'll keep seeing, you know-- we'll not see next year 30% to 40% of retail sales being e-commerce. This is probably going to slow down a little bit.

But the reality is, is that e-commerce is getting better and better at anticipating our habits, giving us, you know, easy ways for things to arrive at our door without us doing much thinking or much work. There is a lot of things on subscription now, which are really helping consumers do less things in their lives. And so, I think we can anticipate that this could still keep growing quite substantially, depending on how fast we get back to normal. And it's going to be interesting to see how next year is going to play out.

SEANA SMITH: Michele, when people change the way that they shop, it obviously has an impact then on advertising. How-- to what degree has this changed the advertising landscape, and how?

MICHELE ROMANOW: Well, this is really interesting. So, you know, one of the ways that most of these small, independent e-commerce stores, largely the ones that we back have grown, are Facebook and Google Ads. And Facebook was really the dominant platform for so long for so much discovery. But this Black Friday, we actually saw Facebook was down almost 9% and Google was up over 52%.

And so, I think there's probably-- you know, this is pretty fascinating to me. This is not a trend I would have expected. But I think there's a few things. I think Facebook was very aggressive before the election with, you know, limiting all sorts of ads. And so there's a lot of advertisers that were cut off or their accounts were suspended, so they actually couldn't spend the same way.

The second thing is now that people are spending so much more time online. Google's very good at following you around the internet. So as you're looking for other things, they're putting those nice little pop-ups being like, remember, you clicked on this a few days ago. Maybe you still want it.

And the last thing is that, you know, this has been the year of TikTok. People have really changed their social media and have added a new platform, which is giving, you know, these small brands a whole new way to reach especially these young Gen Z customers.

ADAM SHAPIRO: You talk about young Gen Z, but we'll really have jumped the shark when your mother and my mother are doing TikTok. Then we're talking. But I gotta say, thank you so much for being here, Michele Romanow, Clearbanc co-founder. Good to see you once again. Stay healthy, and be well.