Originally posted on: https://www.todaystopquestions.com/how-has-the-covid-19-pandemic-affected-online-shopping/
The COVID-19 pandemic has forever altered online shopping behaviors. In an increasingly digital world and a pandemic raging, it’s no wonder online shopping has seen such a boost in sales. Global e-commerce sales are expected to hit $5.5 trillion by the end of this year. The COVID-19 pandemic added $219 billion to American ecommerce sales in 2020 and 2021 and in 2022 it is forecasted that overall, American ecommerce sales will reach $1.06 trillion (a 16.1% increase from the year prior).
How the pandemic changed what we buy online
While ecommerce was growing rapidly even before the COVID-19 pandemic, the pandemic pushed even mor consumers to switch to online shopping. From March 2020 to February 2022, American consumers spent $1.7 trillion online, which is $609 billion more than the two previous years (2018 and 2019). The pandemic helped ecommerce to thrive in 2020 due to both store closures and consumers’ fears of contracting the deadly virus. Many store closures continued through 2021, but began to lighten up when the vaccine became accessible for everyone. Furthermore, the demand for goods surged as many consumers decided to spend their stimulus checks and other extra cash. Since no one could travel or even go out to restaurants, many people had extra money that they reallocated towards things such as home repairs and décor.
The COVID-19 pandemic caused a major shift in consumer behavior. With many people not being able to work during the pandemic, a lot more money was spent on essentials items rather than more luxurious purchases. Since these purchases couldn’t be done in person, they had to be moved online. The online grocery market saw a 103% increase in sales in 2020, as consumers spent over $73.7 billion. This figure increased even more in 2021 with consumers spending a whopping $79.2 billion for online groceries. Each month, American consumers spend an average of $6.7 billion for groceries online, which is up $3.1 billion from before the pandemic.
Other categories that were highly impacted by the COVID-19 pandemic include hardware/home improvement, electronics, and home furnishings. These categories saw a tremendous increase in online sales during 2020 and maintained steady growth throughout 2021 as well. In 2021, American consumers spent $165 billion for electronics online, which is an 8% increase from 2020 and a 26.8% increase from 2019. Americans now spend an estimated $13.6 billion monthly on electronics online, which is a 9.9% increase from pre-pandemic years.
Even though many industries saw a boom in sales during the pandemic, other industries didn’t fare as well. Gasoline station sales fell from $513 billion in 2019 to $428.1 billion 2020 since commuting became unnecessary for many during the pandemic. Bookstores also faced a tremendous hit with sales dropping from $8.9 billion in 2019 to $6.2 billion in 2020. In addition, sales at clothing stores dropped from $269.5 billion in 2019 to $201.4 billion in 2020 since the need for new clothes for the workplace and social outings diminished.
How inflation has impacted ecommerce sales
Gas prices weren’t the only thing affected by the rising rate of inflation. During the pandemic, American consumers paid over $30 billion more for the same goods they purchased pre-pandemic. In terms of ecommerce, inflation caused an additional $4.7 billion in sales in 2020 and in 2021, that figure skyrocketed to $22 billion. In just the first two months of 2022, inflation added another $3.8 billion extra to sales online.
Fortunately, higher prices haven’t halted consumer spending. In 2022, home furnishing giant Wayfair Inc. increased its prices due to inflation and the conversion rate was not impacted at all. Due to the pandemic, American citizens have $2 trillion more in the bank than they did before the pandemic, which is making the rise in inflation a little bit more palatable. It is estimated that in 2022, American consumers will pay $2.7 billion more online for the same number of goods due to inflation.
Shortages in supply impact ecommerce sales
The COVID-19 pandemic has greatly impacted supply chains due to both the continual closings of warehouses due to outbreaks and the surge in American consumer demands for goods. This had led to numerous inventory shortages and more out-of-stock messages than ever before. Between March 2020 and February 2020, American consumers faced over 60 billion out-of-stock messages from online retailers.
Consumers are likely to see an average of one out-of-stock message for every 59 product pages they browse. This is a 235% from before the pandemic. The supply chain has still not recovered and is expected to continue throughout 2022.
What does the boom in online shopping mean for retail shopping?
With consumers now becoming used to finding everything they desire online, it has been hard for brick-and-mortar stores to live up to these same expectations. While many retail stores had to shut down locations, it is actually expected that brick-and-mortar stores will make a comeback post-pandemic. With people being forced to stay indoors, many are itching to get back to their normal lives which includes in-person shopping.
The one thing that retail stores need to remember is that the customers coming in post-pandemic are not the same customers they had pre-pandemic. These new consumers fell in love with the ease and personalization of digital commerce and have completely different expectations than they previously had.
Even though the COVID-19 pandemic caused many to lose jobs and struggle with finances, many households remained employed throughout the pandemic and cut their expenses at the same time. These households now have record-high savings and record-low debt. With government support, interest rates are also low. This has allowed households to save up a lot of money which they now want to spend on things like retail and other social outings. Customers are longing to see and touch products in person, so brick-and-mortar stores are the perfect place to go now that lockdowns are lifted.
With the rise in ecommerce, brick-and-mortar stores should still continue to capitalize on digital platforms. Since consumers have become so used to online shopping that brick-and-mortar stores need to behave in a similar manner in order to keep consumers interested and coming back for more purchases. A great example of this is shown in New York’s MAC Cosmetics concept store where customers can virtually try on makeup in a full-body augmented reality mirror. When they decide on a look they like, shoppers are able to save it to their digital profiles that can be accessed from home.
In conclusion
While COVID-19 didn’t completely wipe out in-person shopping, it’s clear that it has transformed the shopping industry in general. The boom in digital commerce has left customers demanding more personalized experiences when returning to brick-and-mortar stores. Even though we can now shop in person, online shopping is definitely here to stay.
