Consumers around the world spent $ 900 billion more on online retailers in 2020 compared to the previous two-year trend, according to a report released Tuesday by the Mastercard Economics Institute.
Shoppers are returning to restaurants and stores to buy clothes and shoes in person. Even so, they will continue to stock their refrigerators and look for good deals online – a persistent habit developed during the pandemic, according to the report.
Online sales of almost all retailers have increased as customers have been stranded at home. As consumers shopped online at the parking lot and packages or delivery were delivered to their doorstep, e-commerce accounted for about $ 1 in every $ 5 spent at retail worldwide. That’s an increase of about $ 1 in every $ 7 spent in 2019, the report said.
In an interview with CNBC’s Worldwide Exchange with Frank Holland, Mastercard chief economist Bricklin Dwyer said that about 20% to 30% of the $ 900 billion in additional digital spending will continue in 2021 and beyond.
However, long-term earnings from e-commerce will be uneven and will depend on what the retailer sells, how he has adapted his business model and how consumers prefer to shop. For some goods, such as clothing, customers may prefer to return to physical stores, where they can try on clothing before buying it. In certain retail categories, such as electronics, online shopping already generated a larger share of overall sales, so there was less room for growth.
Grocery stores and discount stores will see the most dramatic and long-lasting shift to e-commerce, according to the report. Discount stores include dollar stores, wholesale clubs and other retailers that sell to customers at close wholesale prices. Grocery stores are likely to retain about 70% to 80% of the digital sales gains they saw during the peak of the pandemic and discount stores will retain about 40% to 50% of them, the report said.
For both sectors, online sales represented only a single-digit share of overall sales before the pandemic – creating an opportunity for more remarkable growth.
Clothing stores, restaurants and sports / toy stores saw the biggest initial peak during the pandemic, however, but maintained only 10% to 20% of that peak in sales, according to the report.
Electronics and department stores had the highest penetration of online sales before the pandemic, with e-commerce accounting for about 55% to 60% and 40% to 50% of their total sales, respectively, according to Mastercard. For both sectors, their expected permanent change will be around 20% to 30% of their jump peaks.
Dwyer said grocery owners face unique obstacles – even as more consumers shop online for products, meat and other ingredients. Only about 10% of general food expenditures are made through e-commerce, he said.
“You have to trust someone else to pick your peaches,” he said. “You have to be confident that someone will deliver your goods and still have it good when they arrive. So those are really some of the barriers that we are crossing.”