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E-commerce sales have passed their pandemic peak, but online shopping is still booming in 2020. If some reports are to be believed, we might eschew certain stores forever, such as electronics retailers, health stores, and beauty shops.

This year, due to the coronavirus outbreak, online grocery was tremendously popular. Yet, the majority of people still go to the supermarkets for their regular grocery runs and this will most likely not change anytime soon.

“It’s pretty clear that this has accelerated the shift to online across almost every category,” Michael Maloof told Ben Fox Rubin at cnet. The associate director at Earnest, a data analytics company in New York went on to say “The shutdown really lowered the barrier for a lot of new customers to try channels they never tried before.”

The analysts have monitored vast swathes of credit and debit card transaction information across millions of users for the opening months of the year in order to assess our changing shopping habits.

The shift to online shopping has been stark, with companies like Amazon, Etsy, and Wayfair all experiencing massive sales spikes. Tuesday saw Walmart add to the positive news, with a report that their e-commerce sales have got close to double what’s normal in the last reporting quarter. According to the US Census Bureau announcement on Tuesday, e-commerce made up 16% of all retail spending in the first quarter, a significant increase from 12% previously. 

It’s not all wonderful news, with bricks-and-mortar retail suffering badly. Over two dozen retail companies have declared bankruptcy protection so far this year, with many customers not ready to venture into physical stores yet. 

Even though it’s still too early to predict what changes the pandemic will bring to the future, it’s clear that there will be fewer physical stores and more online shopping. Besides, e-commerce popularity will continue to grow after the pandemic. For now, it’s already exceeding traditional retail in growth.

Image credit: Earnest

Here, we can see the percentages of online retail spending in the US in comparison to stores. 

Overall spending on retail has been on the rise for three months running; the Commerce Department reported that retail sales in July saw a 1.2% uplift even with the dual increases on coronavirus cases and unemployment. 

The data from Earnest also shows that pretty much all retail categories spiked with their online sales when lockdown came towards the start of the year. As the economy has slowly begun to reopen, there has been a shift back to traditional spending, with department stores, apparel and accessories, and sports retail all seeing a return to shops. 

Adobe also tracks online shopping trends and they found similar data. Their reports say that August isn’t seeing the same growth in online sales as was witnessed earlier in the year. Since March there’s been an extra $94 billion spent online. 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.

Increases are coming from lots of categories that are seeing sustained levels of buying. Most businesses are open again, yet online sales are still buoyant, suggesting a long-term shift. For example, online electronics sales were 37% of total retail sales in the US in early January, prior to the pandemic, according to Earnest. That jumped up to 92% as of April, with a boost from the stimulus checks. The end of July saw the number still higher than normal at 58%, 21 percentage points more than when the year started..

“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.”

One of the retail categories that’s stayed broadly similar is grocery shopping. It’s a massive industry, worth over $1 trillion to the US economy each year according to Cowen, that even with the mass shift to online retail, there hasn’t been much of a dent on the sector’s overall sales. 

Grocery sales online took around 13% of US sales when the year began and it’s hovered around 20% since the middle of April. We’d have seen higher percentages if it wasn’t for an increase in sales in physical stores when people were panic buying, as well as eating at home more and avoiding restaurants.

Image credit: Earnest

20% might not feel like a lot, but in terms of online grocery shopping, the actual numbers are phenomenal. Year on year, sales have nearly doubled in the last quarter. Maloof posits that one of the few brakes on further increases is that stores can’t actually keep up with surging demand. 

As online sales surge ever forward, it’s up to the retailers to ponder, how do they convince people to step back into their real stores?

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