Consumers across the globe spent $ 900 billion more on online retailers by 2020 compared to the previous two-year trend, according to a report released Tuesday by the Mastercard Economics Institute.
Shoppers are on their way back to restaurants and returning to stores to buy clothes and shoes in person. Still, they will continue to store their refrigerators and hunt for great deals online – a sticky habit developed during the pandemic, according to the report.
Nearly every retailer̵
In an interview on CNBC’s worldwide exchange with Frank Holland, Mastercard chief economist Bricklin Dwyer said about 20% to 30% of the additional $ 900 billion in additional digital spending will continue in 2021 and the next few years.
However, the long-term benefits of e-commerce will be uneven and depend on what a retailer sells, how they adapted their business model, and how consumers prefer to shop. For some merchandise, such as clothing, shoppers may prefer to go back to brick stores where they can try on an outfit before buying it. In certain retail categories, such as electronics, online shopping was already driving a larger share of total sales, so there was less room to grow.
Grocery stores and discount stores will see the most dramatic and lasting shift to e-commerce, according to the report. Discount stores include dollar stores, wholesale clubs and other retailers that sell to customers at near wholesale prices. Merchants are likely to retain about 70% to 80% of the digital sales gains they experienced during the peak of the pandemic, and discount stores will retain about 40% to 50% of them, the report says.
For both sectors, online sales accounted for only a single-digit share of total sales before the pandemic – creating an opportunity for more noticeable growth.
Clothing stores, restaurants and sports / toy stores, however, experienced the largest initial increase during the pandemic, but held only 10% to 20% of the highest sales, according to the report.
Electronics and department stores had the largest penetration of online sales before the pandemic, where e-commerce accounted for approx. 55% to 60% and 40% to 50% of their total sales according to Mastercard. For the two sectors, their expected permanent shifts will be around 20% to 30% of their maximum jump.
Dwyer said merchants face unique obstacles – even though more consumers shop online for products, meats and other ingredients. Only about 10% of total grocery consumption is through e-commerce, he said.
“You have to trust someone else to pick your peaches,” he said. “You have to trust that someone else is delivering your goods and still have them good when they arrive. So those are really some of the barriers that we cross.”