Mastercard Economics Institute just released a report stating that global consumers spent $900 billion more on online shopping in 2020 compared to previous years. Nearly every online retailer benefited from the pandemic since their customers were stuck at home. $1 out of every $5 dollar was spent on retail globally – a rise from $1 out of $7 dollars in 2019.
The effect of Covid-19 will remain for a while longer. According to Mastercard’s chief economist, Bricklin Dwyer, about 20%-30% of the $900 billion addition will continue in 2021 and the next few years.
However, the pandemic-driven shopping habit is dependent on the types of services and products that consumers are purchasing. If the consumer is looking for a piece of clothing, it would be optimal for the customer to do an in-store shopping to try on and then purchase. Clothing stores, restaurants, and sporting/toy stores experienced the highest surge during the pandemic but will only keep 10-20% of that peak in sales, according to the report.
For electronics, the consumers always preferred to make the purchase online even before Covid-19, with e-commerce making up about 55-60% of overall sales.
Groceries and discount stores will see the most lasting shift after the pandemic. 70-80% of the digital groceries sales gains will likely to be kept and discount stores will hold about 40-50%. However, grocers need to resolve customers’ concerns and continue to improve their customer service and delivery service to keep the e-commerce momentum going.
“You have to trust someone else to pick your peaches. You have to have trust for someone else to deliver your goods and still have them good when they arrive. So that really is some of those barriers that we’re crossing.” Dwyer expressed