According to a report released Tuesday by the Mastercard Economics Institute, consumers around the world spent $ 900 billion more on online retailers in 2020 compared to the previous two-year trend.
Shoppers return to restaurants and return to stores to buy clothes and shoes in person. Still, they will continue to stock up on their refrigerators and look for good deals online, a sticky habit developed during the pandemic, according to the report.
Online sales from almost every retailer increased as shoppers were trapped at home. As consumers picked up online purchases in the parking lot and received packages or takeaways at their doors, e-commerce accounted for about $ 1 out of every $ 5 spent on retail worldwide. That’s an increase of about $ 1 out of every $ 7 spent in 2019, according to the report.
In an interview with CNBC’s World Holland Exchange with Frank Holland, Mastercard’s chief economist Bricklin Dwyer said that between 20% and 30% of the $ 900 billion in additional digital spending will continue until 2021 and the next years.
However, the long-term gains of e-commerce will be uneven and will depend on what a retailer sells, how they adapt their business model, and how consumers prefer to buy. For some merchandise, such as clothing, shoppers may prefer to return to the brick and mortar stores where they can try on a suit before buying it. In certain retail categories, such as electronics, online shopping already generated a larger share of global sales, so there was less room to grow.
According to the report, grocery and discount stores will experience the most dramatic and lasting shift towards e-commerce. Discount stores include dollar stores, wholesale clubs and other retailers that sell to customers at wholesale prices. Retailers are likely to retain between 70% and 80% of the digital sales gains they saw during the pandemic peak, and discount stores will retain between 40% and 50%, according to the report.
For both sectors, online sales accounted for only one-digit share of global sales before the pandemic, creating an opportunity for more remarkable growth.
However, clothing stores, restaurants and toy and sports stores experienced the largest initial rise during the pandemic, but only maintained 10% to 20% of that sales peak, according to the report.
Electronics and department stores recorded the highest penetration of online sales before the pandemic, with e-commerce accounting for approximately 55% to 60% and 40% to 50% of their total sales, respectively. according to Mastercard. For both sectors, their planned permanent change will be around 20% to 30% of their maximum jumps.
Dwyer said supermarkets face unique hurdles, though there are more consumers buying products online, meats and other ingredients. Only about 10 percent of overall grocery spending is done through e-commerce, he said.
“You have to trust someone else to choose the peaches,” he said. “You have to have confidence that someone else will deliver your goods and have them good when they arrive. So it’s really some of those barriers that we’re going through.”