November 17, 2020
In a recent survey of consumers, McKinsey & Co. found that nearly 70 percent intend to continue buying online for store pickup, even post-pandemic. It concluded that, within three months, consumers adopted new c-commerce habits that otherwise would have taken ten years. During the pandemic, many more people were forced to try online shopping as well as other remote applications such as medical appointments or workout classes. As a result, all kinds of businesses added or expanded digital services.
The Wall Street Journal reports that, according to McKinsey senior partner Brian Ruwadi, “you see significant movement on both sides, and that has to result in a significant increase, a fundamental shift in acceleration.” At PVH Corp. (parent company of Calvin Klein and Tommy Hilfiger), president Stefan Larsson stated that, “consumers won’t go back to shopping the way they did before the pandemic … they will go forward into the new normal.”
He added that, “PVH is speeding up digital investments, including building new data systems and warehouses.” At-home fitness company Peloton Interactive, another e-commerce winner, said it “more than tripled to $757.9 million” in its September quarter.
But not all businesses are thriving in the new environment, as brick-and-mortar stores and restaurants struggle to stay afloat. One report stated that, “retail-store closings in the U.S. reached a record in the first half of 2020, and the year is on pace for record bankruptcies and liquidations.”
Some changes are pandemic-centric, such as the temporary closure of theme parks and movie theaters. In Q3, consumers spent 7.2 percent less on services than the same period a year before, while purchase of goods rose 6.9 percent. WSJ notes that, “much of this could reverse once the virus is subdued.”
The Commerce Department revealed that e-commerce’s share of retail sales “rose to 16.1 percent in the second quarter of this year, from 10.8 percent a year earlier and 0.9 percent of total retail sales two decades ago.” The numbers are even more impressive at Macy’s, where e-commerce “now accounts for roughly 43 percent of sales, up from 25 percent before the pandemic.”
Macy’s chief digital officer Matt Baer said that the company has teamed with Google to “improve its search-engine results and added same-day delivery for online orders.” Visa and Mastercard also reported “global growth in tap-to-pay or contactless transactions this year,” with Mastercard stating that, in Q3, 41 percent of in-person purchases were contactless, up from 37 percent in Q2 and 30 percent a year ago.
Bloomberg reports that, “Target this month discontinued its subscription service model as shoppers increasingly look for more convenient and flexible delivery options.” “The majority of our subscription guests have shifted away from regular deliveries to enjoy the speed and flexibility of our same-day services,” said spokeswoman Jacqueline DeBuse.
With the pandemic, more consumers are used to the ease of curbside pick-up of online deliveries and same-day delivery. In response, Target added 8,000 parking spaces for customers picking up online orders.
Amazon Lures Food-Stamp Shoppers as Online Buying Surges 50-Fold, Bloomberg, 11/11/20
Walmart Retreats Around Globe to Focus on E-Commerce, The Wall Street Journal, 11/16/20
Shopping Malls Hope to Find New Life Fueling E-Commerce, The Wall Street Journal, 11/16/20