May 23, 2024


Fashion Your personal

COVID May Have Made Online Shopping Top-Of-Mind, But Traditional Stores Are In Comeback Mode. | Story

The following message is from radio to in-person stores: come back in, the water’s fine.

While the pandemic has been good to Amazon and other shop-at-home websites such as Wayfair and Etsy, many of which saw record profits over the past two years, current data shows bricks-and-mortar stores making a steady comeback, with consumers finding a balance between online and in-person shopping with vaccines and boosters commonplace and the worst of COVID, for now, in the rear-view mirror.

While online’s share of total retail sales during the lockdown-driven second quarter of 2020 hit 15.7%, according to seasonally-adjusted U.S. Census Bureau data, it had fallen to a near-pre-pandemic 12.9% by Q4 2021. This past March marked the first time since COVID where e-commerce sales fell from the same period a year earlier – off 3.3%, the first year-over-year decline since November 2013 – while bricks-and-mortar stores sales increased 11.2%, according to Mastercard SpendingPulse, which tracks transactions made over their payments network as well as survey-based estimates for cash and check spending.

As reported in The Wall Street Journal, several major retailers have seen the trend first-hand. Recent quarterly online sales were down 11% while bricks-and-mortar were up 14% at Dick’s Sporting Goods, while Macy’s share of online sales moved from 44% a year ago to 39%, and Walmart’s overall sales gained 5.6% with online up just 1%. Best Buy, meantime, showed a fiscal year revenue increase even as online sales slipped 12%.

“E-commerce is definitely not as sexy as it was a year and a half ago,” Max El-Sokkary, an analyst at Zevin Asset Management, which owns shares of Amazon and eBay, says. “The momentum that carried e-commerce during the pandemic has slowed down, and at some point the valuations on some of these stocks don’t make sense.” Bernstein Research analyst Mark Shmulik explains the shift this way: “We’ve got over 100 years as a society of going into a store to buy something. That muscle memory doesn’t just switch off because you were forced to buy things online a couple of times during a pandemic.”

Recent research shows while foot traffic at shopping centers has yet to return to pre-COVID levels, monthly visits to the top indoor malls were up 17% in March from the prior month, according to data-analytics firm, while retailers also opened more physical stores in 2021 than they closed for the first time since 2017, according to an analysis of more than 900 chains by research and advisory company IHL Group.