Consumer spending habits returning to normal
Mastercard reports that their Q2 2021 revenue surged 36% over last year, a confident indication that consumer spending is rebounding after the pandemic made shoppers wary of making discretionary purchases.
That’s 9% growth over Q1, amounting to a total of $4.5 billion in consumer spending in Q2.
It’s not just that shoppers are spending more – it’s also that they’re making more digital payments and fewer cash payments. Citibank saw spending on cards increase 40% in Q2 2021.
Contactless payments grew 37% YoY in Q2 2021 to account for 45% of global in-person transactions.
Visa found that 53% of consumers were spending more in June 2021 than in June 2020. Consumer spend is expected to remain elevated through the end of the year.
COVID-19’s impacts on the consumer electronics industry
The electronics sector is one of the many industries that witnessed significant growth online in 2020, with ecommerce up across the board due to COVID-19. Online electronics sales reached new heights last year and are expected to break more records in the years to come.
- 40% of global electronics brands say consumer electronics was the industry impacted the most by COVID-19.
- Computers and consumer electronics represent 22% of all retail ecommerce sales.
- The computer and consumer electronics industry brought $156.5 billion in online sales last year.
- Nearly half of all computer and consumer electronics sales in 2020 happened online.
- Amazon.com was the top online electronics & media store in the US last year, bringing in over $61.3 million in revenue in this category. BestBuy.com followed at $16.71M, followed by Apple.com($14.2M), Walmart.com ($10.3M), and Target.com ($4.3M).
- The consumer electronics category is expected to reach a record $74.86 million in online revenue in 2021.
- By 2025, digital revenue from consumer electronics will pass $88.3 billion.
- The electronics & media category brought nearly $93.8 million in total revenue in 2020.
How apparel retailers & brands have responded to the pandemic
Many apparel brands and retailers have been forced to carefully rethink their strategy in light of COVID-19. Gap plans to double its online business by the end of 2023 and is building a $140 million warehouse to make it happen. At the same time, the retail giant is shutting roughly 30% of its North American stores.
As the leading casual apparel company worldwide, Gap expects that 50% of its sales will come from digital this year. Ecommerce accounted for 45% of Gap’s revenue in 2020, up from only 25% in 2019. Online sales for Gap were up 54% in 2020, while total sales declined 15.8%.
Omnichannel retailers Kohl’s and Nordstrom Inc. saw significant online growth last year, as well. Online sales for Kohl’s were up 41% in 2020, with 40% of online orders picked up in-store. Ecommerce accounted for 55% of Nordstrom Inc.’s revenue in 2020, up from 33% in 2019. 30% of online orders were picked up in-store compared to 10% in 2019.
New report: 2021 Holiday Success Plan for Brands
This holiday season is set up to be yet another challenge for brands looking to grow profitably.
Unpredictable shopping habits and behaviors, the ever-present dangers of another pandemic wave, and the volatility of a market that soared unexpectedly last year will make this holiday season a time of ecommerce instability. The brands that don’t proactively anticipate roadblocks or face challenges head-on will be left in the digital dust.
Luckily, we love challenges here at ROI – which is why we’re so excited to share with you our executive holiday guide for 2021.
Our 2021 Holiday Success Plan for Brands reveals key insights to make sure you are prepared to thrive this holiday season. You’ll uncover insights like:
- How to optimize the 4 crucial components of a successful holiday strategy
- Targeting strategies to reach new consumers and leverage new buying behaviors
- The most critical buying factor to shoppers this holiday season & how your brand can dominate the competition
Claim your copy to empower your brand to have a profitable holiday shopping season in spite of the uncertainty of the ongoing pandemic. Cheers to your brand’s success!