Retail sales around the globe have felt the impact of the COVID-19 pandemic, with in-store shopping seeing a significant plummet in activity. The initial shelter in place orders had a huge impact on consumer purchases. In the United Kingdom, April retail sales declined by approximately 18%. In the US, retail sales dropped 16%, and in China, April retail sales dropped 7.5%. Most of the declines in retail sales relate to large declines in spending on discretionary products. Food sales have remained stable and in many instances have increased. In the United States, food sales at grocery stores have increased by 13% year over year.
E-commerce experienced an uptick, as consumers who are stuck at home purchased goods online. In April, non-store retail sales increased by a robust 25%. While the number of retailers that are losers outpaced the winners, the digital world has experienced advances that are likely to remain even when the pandemic is nullified. We’ve continued to see volatility in the markets across the globe, but e-commerce has maintained steady growth as consumers stay home and opt for shopping online.
Who Has Benefited in China
In China, the situation in Hubei Province appears to have generated an acceleration of the trajectory towards digital sales. The outbreak and the subsequent data has slowly begun to show a detailed picture of adjustments made by Chinese consumers.
A similar spike in online activity is also occurring in food sales and fresh produce. The number of online searches for fresh produce on Baidu for the first two months of the year was up anywhere from 273% to 2800% YoY. The ability to buy online and have your groceries delivered has allowed Baidu to gain a greater market share. This led to upside volatility to Baidu share trading. Leading social e-commerce platform Pinduoduo reported that condoms and birth control are among the most popular items for sale on its platform.
Online Purchases Expand in the UK
A Google survey conducted in May in the United Kingdom showed that 80% of car shoppers would now consider buying a vehicle online. This is up 14% since the beginning of the pandemic. As a result, 20% said that they would purchase a vehicle sooner if there was an online option available. Additionally, 90% of those surveyed in the UK use the internet to shop for a car before visiting a showroom, pushing dealers to provide a robust online shopping experience to enhance their sales.
Online Purchase in the US have Increased
In the US online sales for consumer-packaged goods were up 45.0% in April according to U.S. e-commerce data from research and polling firm Nielsen. A blockbuster month of May in retail sales gave a boost to the market, but things are still very much in flux. As retail stores begin to slowly re-open, we’ll keep close tabs on the retail industry to see how the pronounced shift to e-commerce continues to impact the industry.
How Has Shopping Experience Changed?
The move toward shopping using online stores has led to increased use of mobile devices. Mobile phones are the most popular device for online shopping. 72% of consumers are using mobile devices to shop in stores according to the latest PYMNTS’ 2020 Remote Payments Study.
The Bottom Line
As the shelter in place orders get lifted and restrictions are diminished retail sales at stores will begin to accelerate. During the pandemic, the stay at home mandates created a new buying habit which will likely persist even when things begin to revert to normal. These new buying habits should assist e-commerce which has brought forward the digital shopping experience. Success for companies will depend on the moves they make now while the virus continues to linger and wreak havoc on a variety of industries.