Consumers around the world have spent $ 900 billion more on online retailers in 2020 than the previous two-year trend, according to a report released Tuesday by the Mastercard Economics Institute.
Shoppers head back to restaurants and back to stores to buy clothes and shoes in person. Still, they will continue to store their refrigerators and look for good deals online – a sticky habit developed during the pandemic, according to the report.
Almost every retailer̵
In an interview with CNBC’s Frank Holland, Mastercard chief economist Bricklin Dwyer said about 20% to 30% of the $ 900 billion in additional digital spending would continue in 2021 and the next few years.
However, long-term profits from e-commerce will be uneven and will depend on what the retailer sells, how they have adapted their business model and how consumers prefer to shop. For some goods, such as clothing, buyers may prefer to return to the brick and mortar stores, where they can try on clothing before buying it. In some retail categories, such as electronics, online shopping has already led to a larger share of total sales, so there has been less room for growth.
According to the report, grocery and discount stores will see the most dramatic and lasting change to e-commerce. Discount stores include dollar stores, wholesale clubs and other retailers that sell to customers at prices close to wholesale. Consumers are likely to keep about 70% to 80% of the digital sales profits they saw during the peak of the pandemic, and discount stores will keep about 40% to 50% of them, the report said.
For both sectors, online sales account for only a single-digit share of total pre-pandemic sales – creating more visible growth.
However, clothing stores, restaurants and sports / toy stores saw the biggest initial jump during the pandemic, but maintained only 10% to 20% of this peak in sales, according to the report.
Electronics and department stores had the highest prevalence of online sales before the pandemic, with e-commerce accounting for about 55% to 60% and 40% to 50% of total sales, respectively, according to Mastercard. For both sectors, their expected constant change will be about 20% to 30% of their peak jumps.
Dwyer said groceries face unique obstacles – even as more consumers shop online for products, meats and other ingredients. Only about 10% of total food costs are through e-commerce, he said.
“You have to trust someone else to pick your peaches,” he said. “You have to trust someone else to deliver the goods to you and still be good when they arrive. So these are really some of the barriers we cross.”