A general assumption that state restrictions due to COVID-19 drove consumers from retail stores to online sales may not be entirely accurate, according to a data analysis. While e-commerce sales skyrocketed in 2020 and store sales declined overall, Commerce Signals data indicates that some of the states with the highest percentage increases in e-commerce sales also experienced the smallest declines in store sales.
Commerce Signals tracks consumer spending using credit and debit card data, collecting information from more than 40 million households in the United States. It anonymizes this data and sells the information and analysis to retailers, marketers and others interested in consumer spending trends.
“We have some customers who are retailers in various categories – they are national merchants and we are working with their corporate marketing groups,” said Nick Mangiapane, director of marketing at Commerce Signals, to Modern Shipper. “Obviously, every merchant knows what their stores are doing … but what is really difficult for them is to understand if this is something they are doing [nationally] or that the local store manager is doing well … or is that [store] in a county that has very strict restrictions or very flexible restrictions? “
A Modern Shipper analysis of company data from March 15, 2020 to February 13, 2021, found that of the 10 states with the lowest percentage decline in retail sales in stores, six of them – West Virginia, Mississippi, Alabama , Kentucky, South Carolina and Idaho – ranked in the top 10 states with the highest percentage of e-commerce growth. In addition, eight of them, including the top six, ranked among the top ten in a larger percentage of overall retail sales growth during that period.
The heat maps show this, suggesting that, in general, the states of the Southeast performed better in both areas.
Growth of e-commerce sales state by state
Drop in in-store sales by state
West Virginia had the largest growth in e-commerce in the country during that period, with sales growing 30%, data from Commerce Signals show. The state was also in third place in all the growth of the sales channel, with 7.1%, and the ninth in the growth of sales in stores, with 7.7% less.
The main state of sales in stores was Alabama, which had a drop of only 3.3%. This state, however, was the fourth overall e-commerce growth with 26.1% and the second in all channels with 9%. Mississippi was third in e-commerce sales growth with 27.6%, second in store sales with 3.7% less and first in all 10% growth channel sales.
Maine was the second in growth of e-commerce retail sales with 28.8%, but did not rank in the top 10 in the other segments.
The rest of the top 10 in e-commerce sales were Kentucky (24.7%), Georgia (22.6%), Michigan (22.5%), South Carolina (21.8%), Delaware (21.5%) %) and Idaho (21.2%).
The last 10 states in terms of e-commerce growth were Florida (10.6%), Nevada (9.6%), Montana (9.4%), Arizona (9.3%), Illinois (8.8% ), Iowa (8.4%), California (7.8%), New York (6.7%), Hawaii (4.8%) and Wyoming (minus 6.7%).
In terms of ratings based on in-store sales, the 10 best performing states were Alabama (3.3% less), Mississippi (3.7% less), Idaho (4.7% less), Kentucky (6% less ), South Carolina (6.1% less), Utah (6.7% less), Louisiana (7.3% less), Indiana (7.7% less), West Virginia (7.7% less) and Arkansas (8.3% less).
The worst 10 were Rhode Island (minus 17.3%), New Mexico (minus 17.8%), Maryland (minus 18%), New Hampshire (minus 18%), New Jersey (minus 18.4%), Connecticut (minus 18.5%), Massachusetts (minus 20.6%), California (minus 20.8%), Wyoming (minus 21.5%) and New York (minus 22.4%).
Retailers have benefited from Amazon’s decision (NASDAQ: AMZN) to move Prime Day from its traditional daylight saving time to October 13-14 in 2020, kicking off the holiday shopping period, said Mangiapane.
“The holidays really started with Amazon, when Prime Day was held in mid-October. There was a big spike there and it was really bigger than the Black Friday spike, ”he noted.
The pandemic has turned the retail world upside down, and brands with no data have struggled to take advantage of it. For example, many retailers assumed that Christmas week would see a drop in sales, but it did not, Mangiapane said, noting that online sales that week increased 67.44% year on year.
Since March / April 2020, online purchases have increased by 52.9%, while in-store sales have fallen by 0.6%. Before COVID, online purchases had a trend of about 20% above the previous year, slightly better than the 2016-2019 period, when e-commerce purchases ranged from 13.37% to 15.58% growth, according to data from the US Census Bureau.
US census retail sales
Census Bureau data also shows that, during the same period, retail sales in stores grew in the range of 1.8% to 3.3%, suggesting that the 2020 drops were entirely the result of COVID and state restrictions .
Looking further at the numbers, Commerce Signals data found that total retail consumer spending increased 21% in October, 17.9% in November and 16% in December. Online grew 55.9%, 53.2% and 47%, respectively.
Starting with Prime Day and following up to Black Friday, the year-on-year growth for all channels was 34%, but the online channel was 83%. Starting with Black Friday, year-on-year online growth increased by 53%.
Commerce Signals data tracks the spending of more than 1,300 merchants, including major retailers such as Walmart, Amazon, Target and The Home Depot, in 26 categories, such as discount stores, hardware stores, clothing stores, gas stations, restaurants and hotels. For merchants, this information is presented through dashboards that can split spending by zip code, giving them insight into the performance of individual stores or how online spending in certain areas is being tracked. Many also use this information to create targeted marketing programs, said Mangiapane.
The company offers a free tracking tool (free registration is required) that allows anyone to track consumer spending compared to diagnosed COVID-19 cases. The tool found a 21.1% growth in online sales since the beginning of COVID until February 13 this year. In-store purchases increased by 2.5% during that period. The tool shows the use of credit and debit card data by state, which helped to identify which states with the most flexible restrictions had the highest growth in store sales, and those with the most stringent restrictions had the greatest growth in online sales.
“When you compare sales by states and which states seem to have consumer purchases growing … there is definitely a relationship between physical sales and the level of restrictions in place there,” said Mangiapane. “There has been a significant shift in online shopping and there are no signs that it is decreasing.”
In addition to tracking sales, users of Commerce Signals panels can drill down to see how they – or their stores – are doing relative to their colleagues. For example, Amazon grew 51.1% year on year, but its comparative group of retailers saw sales increase by 8.6%.
“It is a way for them to focus on where they are winning. The tool does everything, except to say why – it helps them to focus, ”said Mangiapane.
Click for more articles on Modern Senders by Brian Straight.
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