COVID-19 industry impacts: Where we stand now
Last month marked the ninth month in a row of total retail sales growth as the world recovers from a pandemic that led to total retail sales declining 10.5% last year.
Total retail sales were up 11% year-over-year this June, a 10.4% increase over 2019. Ecommerce was up 8.3% YoY.
In June 2021, ecommerce was up 95% over June 2019.
Jewelry, lodging, and department stores saw the biggest yearly sales growth compared to the other sectors measured in Mastercard’s SpendingPulse Report. These are all categories that suffered at the height of the pandemic.
Conversely, grocery saw the smallest YoY sales growth, with the furniture & furnishings sector declining 5.3%. Every category was up over 2019 except for lodging, which declined 2.5%.
Apparel and restaurants also saw notable growth last month over 2020, with sales increasing 62.9% and 55.1% respectively.
Stats roundup: The latest COVID-19 & ecommerce stats
- Online grocery will keep 70-80% of its pandemic-related growth (Mastercard)
- Overall ecommerce will retain 20-30% of the growth it saw at the height of the pandemic (Mastercard)
- Ecommerce is expected to grow 13.7% in 2021 to approach $909 billion and account for 15.5% of all retail sales (eMarketer)
- Amazon’s ecommerce revenue grew 71% YoY in Q1 2021 compared to before the pandemic started (PracticalEcommerce)
- Nearly 63% of consumers do all of their shopping online (BigCommerce)
The state of consumer shopping behavior today
COVID-19 transformed how consumers make everyday purchases, forcing brands and retailers large and small to shift their marketing strategies. In fact, ecommerce grew 18% while brick-and-mortar declined 14%.
But with pandemic restrictions subsiding and in-store shopping making a return, will consumers’ preference for digital continue?
When it comes to large retailers and department stores, 58.2% of consumers say they shop in-store, while 31.9% say they purchase from a particular brand’s online store.
Still, overall, 62.5% of consumers report that they do most of their shopping online, with 30.8% saying that the convenience of online shopping outweighs any drawbacks.
How can brands get consumers to choose them over a competitor? Giving consumers plenty of options – though much easier said than done – will go a long way in boosting your conversions, revenue, and average order value (AOV).
70% of consumers are more likely to spend more money when their preferred payment method is an option.
COVID-19 supercharged the adoption of hybrid payment options including buy online, pick up in-store (BOPIS), buy now, pay later (BNPL), and digital wallets like Apple Pay. In fact, 35.2% of online shoppers now prefer paying with digital wallets.
COVID-19 impacts on Target & Walmart ecommerce
Target will see retail ecommerce sales hit a record $18.64 billion this year, up from just $6.79 billion in 2019. After surging 143.9% last year due to the pandemic, this year’s growth will be a more modest 12.5%.
In Q1 2021, curbside pickup surged over 600% for Target. More than 95% of the retail giant’s total sales were driven by brick-and-mortar stores.
Amazon is expected to make more in ecommerce sales this year than the rest of the top 10 US retailers combined. The retail giant is expected to deliver $386.4 billion in online sales this year, followed by Walmart at $67.4 billion and eBay at $40.5 billion.
Target was not in the top 10 at all until 2019, when it accounted for 1.1% of all US retail ecommerce sales. Now it sits at number 6, right behind The Home Depot, which is projected to deliver $21.42 billion in ecommerce sales this year.
Buy now, pay later surges among Millennials, Gen Z
Alternative payment options have surged over the past year and a half after the coronavirus pandemic pushed consumers to be wary about high-contact shopping.
Buy now, pay later (BNPL) is one of the myriad alternative payment methods that has seen the most growth since last year, with BNPL adoption up more than 81% year-over-year. In fact, over 45 million consumers will use BNPL this year.
Clothing, electronics, and furniture are the most common items purchased through buy now, pay later options. While consumers enjoy BNPL for its ease of use, flexibility, and low interest rates, 57% of shoppers say they regret using BNPL because it was too expensive.
Out of the 45 million shoppers who are expected to use BNPL services this year, nearly 3 out of every 4 are Gen Z or Millennials. Gen Z alone is expected to make up almost half of all BNPL users by 2025, with Millennials not far behind.