A report released by the MasterCard Institute for Economic Research on Tuesday showed that compared with the trend of the previous two years, global consumer spending on online retailers increased by 900 billion U.S. dollars in 2020.
Shoppers are returning to the restaurant and then back to the store to purchase clothes and shoes in person. However, they will continue to store refrigerators and look for good deals online-the report pointed out that a stubborn habit was formed during the pandemic.
As shoppers are trapped at home, almost every retailer’s online sales have increased. When consumers shop online in the parking lot and drop packages or takeaway goods at the door, e-commerce accounts for about $1
In an interview with CNBC’s Global Exchange, MasterCard’s chief economist Bricklin Dwyer, MasterCard’s chief economist Bricklin Dwyer said that among the additional digital spending of 900 billion US dollars, About 20% to 30% will last until 2021 and the next few years.
However, the long-term benefits of e-commerce will be uneven and will depend on how retailers sell, how they adjust their business models and how consumers like to shop. For certain products (such as clothing), shoppers may prefer to go back to the physical store and try on the clothes before buying. In certain retail categories (such as electronic products), online purchases have driven a larger share of overall sales, so there is little room for growth.
According to the report, grocery stores and discount stores will see the most dramatic and lasting shift to e-commerce. Discount stores include dollar stores, wholesale clubs and other retailers, which sell to customers at prices close to wholesale. According to the report, grocers will likely retain about 70% to 80% of the digital sales revenue they saw during the peak of the pandemic, while discount stores will retain 40% to 50% of it.
For these two areas, online sales accounted for only a single-digit share of total sales before the pandemic, which created opportunities for more pronounced growth.
The report stated that clothing stores, restaurants, and sports/toy stores experienced the largest initial surge during the pandemic, but only maintained 10% to 20% of their peak sales.
Mastercard said that before the pandemic, electronic products and department stores had the highest online sales penetration, with e-commerce accounting for 55% to 60% and 40% to 50% of its total sales, respectively. For these two sectors, their expected permanent changes will be about 20% to 30% of their peak jumps.
Dwyer said grocery stores face unique obstacles-even as more and more consumers are shopping online to purchase produce, meat and other ingredients. He said that only about 10% of total grocery store consumption is achieved through e-commerce.
He said: “You have to trust others to pick peaches.” “You have to trust others to deliver your goods, and keep them in good condition when they arrive. These are indeed some of the obstacles we are overcoming.”