The peak for e-commerce sales during thehas passed, but we're still buying a whole lot more stuff online in 2020. In some cases, the latest stats suggest many of us may decide we never want to return to certain kinds of stores, like electronics retailers or health and beauty shops.
The coronavirus outbreak has also resulted in a huge year for, though the large majority of people still go to supermarkets for their regular grocery runs and that likely won't change anytime soon.
"It's pretty clear that this has accelerated the shift to online across almost every category," said Michael Maloof, an associate director at Earnest, a data analytics company in New York. "The shutdown really lowered the barrier for a lot of new customers to try channels they never tried before."
Earnest tracked anonymous credit and debit card information from millions of people for the first few months of the year to find out how our shopping habits have changed.
These changes have been a boon for many online retailers, including Amazon, Etsy and Wayfair, which have announced . On Tuesday, Walmart added to that good news, reporting e-commerce sales nearly doubling in its latest quarter. The US Census Bureau also said Tuesday e-commerce sales made up 16% of total retail in the second quarter, up from 12% in the first quarter, a huge increase.
But this growth has come at the expense of an already ailing brick-and-mortar retail industry. More than two dozen retailers have declared bankruptcy protection this year, as many customers have been afraid to venture into stores.
While plenty is still unknown about what the post-pandemic future will look like, it's clear it will include fewer physical stores. Plus, e-commerce -- which has already been growing faster than traditional retail -- should see a permanent boost following the pandemic.
Retail spending overall has been up for three months running, with the Commerce Department reporting last week that July retail sales rose 1.2%, despite a high rate of coronavirus cases and high unemployment.
According to Earnest's data, just about every major retail category saw a spike in online sales during the lockdowns earlier this year. But, as the economy has reopened, sales have been shifting back to physical retail, especially for department stores, apparel and accessory shops and sporting goods retailers.
Adobe, which also tracks online purchases, found the same broad trend, saying this month that online spending isn't growing as fast as it was earlier this year. It added that since March, an additional $94 billion -- yes, billion -- was spent online due to the outbreak. At its current growth, online spending will exceed all of 2019 by early October, Adobe said, and that's without an Amazon Prime Day in July, and before this year's Black Friday and Cyber Monday.
That boost is coming from plenty of categories that are still seeing higher e-commerce sales. That's happened even after businesses reopen, suggesting some spending has shifted online for good. For instance, online electronics sales were 37% of total retail sales in the US in early January, prior to the pandemic, according to Earnest. They jumped to 92% by April, boosted by stimulus checks. This number remained at 58% at the end of July -- 21 percentage points higher than at the beginning of the year.
"There are categories that will never be the same," Maloof said. "I think that there are places in which people -- there's been a shift, they just realize that they don't really need to go to the store to buy TV. And yet there are others that are going to take a lot longer."
Among those categories that haven't changed as drastically is grocery. That industry is so big -- worth over $1 trillion in the US every year, according to Cowen -- that even an amazing year for online sales hasn't made a huge dent on overall sales.
Online grocery made up 13% of US grocery sales at the start of the year, and has stayed around 20% since mid-April. These percentages would have been higher except sales in physical stores were also up for part of the year, since people were stocking up and buying more stuff at supermarkets since they weren't going to restaurants.
Now, 20% may not sound like much, but for the online grocery industry these numbers are phenomenal, with sales from a year earlier more than doubling for the past three months. Maloof said part of what's stopping online grocery from growing even faster is these companies are struggling to keep up with the surge in demand.
So, while it's no surprise online is getting bigger than ever, the question continues: How do stores convince customers to come back?