American shoppers are on course to surpass total online spending in 2019 as soon as early October, analysts forecast, though the explosive growth in pandemic-driven ecommerce is beginning to slow as parts of the country attempt to reopen.
Data from Adobe’s Digital Economic Index report suggest Americans have now spent $435bn online since the start of the year — with analysts estimating almost $100bn in extra spend moving online due to Covid-19 lockdowns.
At the current growth levels, Americans will have spent more online than they did for the entirety of 2019 by October 5 — with Amazon’s Prime Day, Black Friday, Cyber Monday and Christmas still to come.
“We’ve just trained the consumer to shop a different way,” said Sonia Lapinsky from retail consultancy AlixPartners. “They’re now comfortable at home. They’re used to buying things without ever having to leave their house.”
That said, Adobe’s analysis, compiled using anonymised transaction data from 80 of the top 100 online retailers, suggests some level of eagerness to return to brick-and-mortar stores once conditions allow. While each month since March has brought a new sales record for online shopping, July’s $66.3bn spend was up 55 per cent, year-on-year, Adobe said, compared to growth of more than 70 per cent in each of the previous two months.
States that had loosened lockdown rules saw a smaller increase in online spending than areas where stricter measures were in still in place throughout July.
As well as the modest return to brick-and-mortar locations, spending levels also dropped “as households tightened their belts due to falling employment levels and looming cutbacks in unemployment benefits”, said Adobe analyst Vivek Pandya.
Maintaining its boost in popularity since March was “buy online pick up in store” — up 23 per cent year-on-year, with almost a third of consumers surveyed saying they preferred that option over delivery.
Amazon’s continued struggle to maintain its one or two-day delivery promise has created an opening for competitors such as Walmart and Target, which have the advantage of having a larger number of locations that are much closer to communities, offering both fast delivery and allowing customers to drive to their nearest location and fetch items immediately.
“What they’ve been doing is leveraging their retail network and turning them into mini-fulfilment centres,” said Ms Lapinsky from AlixPartners.
Amazon is said to be looking into addressing this issue by taking up some recently vacant mall space belonging to Simon Property Group, according to a Wall Street Journal report on Sunday. Neither company would comment on the report.
“I think we’re seeing Amazon reacting to that loss in market share with an amplifying and an acceleration of tactics to build out their networking further,” Ms Lapinsky added.