By Randi Gollin | American Express Credit Intel Freelance Contributor
5 Min Read | October 28, 2020 in Money
More and more people have begun to shop online.
The push towards virtual shopping shows no signs of slowing down.
While some spending categories like online grocery shopping seem to be taking off, other industries that traditionally rely on physical stores may need to reconsider their retail strategy to meet customer desires for convenience.
Online shopping has undergone a sea change. Americans are shifting from in-store to online purchases, and many online retailers are seeing their sales grow. Meanwhile, industries that have traditionally relied on a physical presence – like the fashion industry – may need to reimagine retail strategies to embrace people’s rising desire to shop digitally.
Here’s a look at how spending habits are evolving as online shopping grows in popularity – and what it could mean for the future of all our shopping experiences.
Online shopping has recently seen a growth surge. In the first six months of 2020, online spending made up 18.6% of all retail sales, a leap from 14.7% for the same stretch in 2019.1 Looking ahead, online retail sales are expected to rise to $6.5 trillion by 2022, from $3.5 trillion in 2019 and $1.3 trillion in 2014.2
Why? Shopping online is often easy and convenient. Apps and websites streamline our ability to add items to our cart, check out, and even create standing orders to restock on goods we need regularly. We can make purchases on the go with our mobile phones without even needing our credit cards handy, and some devices let you store payment information so you can check out with nothing more than your fingerprint.
As people grow more accustomed to shopping online, it seems that new shopping habits may be transforming how and where people spend their money. Here are some of the ways Americans are spending increasing amounts of their virtual shopping dollars:
Meanwhile, some spending categories seemed to be vulnerable to macro shifts in the economy. One report found that online sales of clothing fell by 30% to 40% in the U.S., likely because people began to emphasize necessary spending over discretionary spending.6 The fashion industry is also traditionally reliant on a brick-and-mortar presence since many people try on clothes and shoes before buying.
Online shopping patterns show signs of becoming long-lasting, if not permanent. For example, when asked how they expect their own habits and behaviors to change going forward, 27% of shoppers said that they would shop online for grocery delivery more than before, and 24% said they would order groceries online for pick-up more than before.7 But for online shopping to truly stick around, experts suggest that businesses must really take a customer-first approach by making online shopping totally seamless, being transparent about delivery delays, and helping people new to online shopping by providing clear navigation tools and online support.8
Looking further into the future, the growth of online shopping could be the catalyst for adoption of technology-enabled solutions that change shopping experiences – and could change other everyday experiences, too.9 Specifically, Nielsen expects that some technology could further enhance how we shop online, including the use of QR codes, augmented and virtual reality, and personalized location alerts. In isolated examples, augmented/virtual reality technology popularized in videogames is already helping online shoppers see themselves in new outfits and get better-fitting blue jeans.
As people become more comfortable with online shopping, it’s likely that online sales will continue to grow. In order to keep up the momentum, experts suggest physical stores will have to support online sales and ensure that shoppers can enjoy a seamless physical-and-online shopping experience.
1 “Charts: How the coronavirus is changing ecommerce,” Digital Commerce 360
2 “Retail e-commerce sales worldwide from 2014 to 2023,” Statista
4 “Top 100 Fastest Growing & Declining Categories in E-Commerce,” Stackline
6 “It’s time to rewire the fashion system: State of Fashion coronavirus update,” The Business of Fashion and McKinsey & Company
7 “Do Shoppers Think Their COVID-19 Shopping Behaviors Will Continue?,” Food Industry Association
8 “COVID-19: The Unexpected Catalyst for Tech Adoption,” Nielsen