Are you shopping differently because of the pandemic? Most people are now comfortable getting their items delivered instead of driving to the nearest mall.
After the COVID-19 outbreak, consumers shifted their habits in several ways. More and more people started staying home to work and avoiding public places like malls.
E-commerce has boomed as a result of these changes in consumer taste, and many businesses have adapted their tactics accordingly.
E-Commerce Boom
The Annual Retail Trade Survey (ARTS) has been conducted by the Census Bureau annually since 1952, and its results are used to estimate key retail industry metrics like total annual sales, online sales, year-end inventories, sales taxes, purchases, per capita sales, total operating expenses, and gross margins on a national scale.
Seven decades of information shed light on retailing’s past. In 1998, for instance, when online sales were under $5 billion and internet shopping was only emerging as a significant force, ARTS began collecting statistics on e-commerce. After more than two decades, online retail sales reached $800 billion.
According to the most current report from 2020 ARTS, online purchases jumped from $571.2 billion in 2019 to $815.4 billion in 2020—a 43% rise.
Fall in Revenue for Other Businesses
Some businesses saw a fall in revenue from 2019 to 2020 as a result of the pandemic lockdowns that kept people at home, working, buying, and even learning online, even though retail e-commerce saw growth.
See how certain types of American retail did in the online market below:
- Since many people no longer needed to commute and the pace of life slowed, gas station sales dropped from $513.5 billion in 2019 to $428.1 billion in 2020.
- In 2020, bookshop revenue will be $6.2 billion, down from $8.9 billion in 2019.
- The desire to buy new clothes and accessories for the office or social excursions decreased, leading to a drop in sales at apparel and clothing accessory retailers from $269.5 billion in 2019 to $201.4 billion in 2020.
Covid-19 and E-commerce
The epidemic has hastened the transition to a digital society and set in motion new habits of internet purchases that are likely to have long-lasting impacts.
According to a poll of over 3,700 people in nine developing and industrialized nations, the COVID-19 epidemic has permanently altered online buying habits.
Titled “COVID-19 and E-commerce,” the study looked at how the pandemic affected people’s propensity to make use of digital products and services. Involved were the countries of Brazil, China, Germany, Italy, the Republic of Korea, Russia, South Africa, Switzerland, and Turkey.
More than half of those surveyed reported increasing their frequency of online shopping and use of the internet for information on anything from health to entertainment since the outbreak.
The poll found that consumers in developing markets were the most likely to have switched to internet shopping.
The global spread of COVID-19 has hastened the transition to an increasingly digital society. UNCTAD Secretary-General Mukhisa Kituyi remarked, “The adjustments we make now will have enduring repercussions when the international economy starts to recover.”
He said that the increasing popularity of internet shopping throughout the globe shows how critical it is that all nations have access to the benefits of digitalization as the world goes from pandemic response to recovery.
Consumer Behaviors
The introduction of COVID-19 increased the already rising trend of people purchasing goods online.
Online retail sales in the United States climbed from 5.3% of total retail sales in 2012 to 11.0% in 2019 before the pandemic hit (U.S. Department of Commerce, 2013, 2020a). After the COVID-19 epidemic spread, people were told to remain indoors, stores were locked down, and people were generally hesitant to buy in person, all of which contributed to a rise in internet purchases.
Compared to the 3.4% growth in overall retail sales, the 32.4% increase in e-commerce sales over the previous year is especially impressive. Currently, online purchases account for 14% of all retail sales in the United States (U.S. Department of Commerce, 2021b).
Policymakers have taken an interest in the e-commerce sector and the determinants of such behavior because of the widespread socioeconomic and behavioral implications it may have, such as on residential location decisions, travel mode preferences, and daily retail activities (Circella & Mokhtarian, 2017).
Retail Evolution
Retailers are adapting to the changing market by capitalizing on the convenience economy of online shopping and at-home delivery, a trend that has been accelerated by the epidemic.
Globally, the economy is slowing down as a result of several factors, including increased gas costs and their knock-on effects on consumers, higher unemployment rates, and the ongoing repercussions of the housing market boom.
However, despite the pessimism of economic forecasters, internet enterprises continue to thrive. All sorts of products and services, from SaaS to downloadable media to social networking sites, are sold by these online retailers.
The fact that these businesses prioritized developing what I term “a long-lasting commerce model” contributed significantly to their success. The Internet is facilitating a dramatic transition away from the tangible to the immaterial consumption of goods and services.
The commercial world started to make this transition in the late 1990s, with the catalog and mail order model serving as an early comparison. The deeper the impact of online distribution of the product or service, the better.
These Changes are Permanent
According to the report, people’s internet habits will alter even after the COVID-19 epidemic has ended.
The vast majority of those polled, particularly in Turkey and China, expressed the intent to continue doing their shopping, including the bulk of their purchases of needs, online. Thus, we know these changes are long term and e-commerce is here to stay.
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