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The coronavirus pandemic continues to provide a push to the e-commerce industry as shoppers are still preferring the online shopping mode. This holiday season was no different when Americans filled in their shopping carts with a click from the comforts of their homes.
Going by a Mastercard SpendingPulse report, holiday retail sales in the United States after excluding automotive from Nov 1 through Dec 24 climbed 8.5% year over year. Online sales rose 11% and contributed to 20.9% of overall retail sales, up from 20.6% in 2020 and 14.6% in 2019, on par with the digitization trend.
The pandemic has remained a blessing in disguise for the e-commerce industry to date as people continue to practice social distancing and shop online for all essentials, especially food items.
Considering high demand for online shopping, retailers are moving toward a hybrid/omnichannel model so that customers can enjoy quick delivery or collect items ordered online (BOPIS, curbside pickup) at their convenience and through apps that arrange personal shoppers.
In this regard, Oliver Chen, a retail analyst for Cowen commented that several retailers, including Walmart, Costco and Target, are well-positioned because they cut across merchandise categories along with online business options, like curbside pickup and home delivery, per a CNBC article.
According to Mastercard SpendingPulse, U.S. retail sales — excluding automotive — for the 75 days that run from Oct 11 to Dec 24 were up 8.6% from a year-earlier level. The report also demonstrated a year-over-year increase in sales for several categories featuring 47.3% for apparel, 32% for jewelry and 16.2% for electronics. Department stores witnessed sales growth of 21.2%, per Mastercard SpendingPulse report.
Commenting on the data, Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated, reportedly said that “Shoppers were eager to secure their gifts ahead of the retail rush, with conversations surrounding supply chain and labor supply issues sending consumers online and to stores in droves. Consumers splurged throughout the season, with apparel and department stores experiencing strong growth as shoppers sought to put their best dressed foot forward.”
Furthermore, U.S. consumer confidence strengthened in December. The Conference Board's measure of consumer confidence index stands at 115.8 in December, comparing favorably with an upwardly revised reading of 111.9 in November. December’s reading surpassed the consensus estimate for the metric, coming in at 111, per a Bloomberg poll. The latest consumer sentiment readings for December also look encouraging as the metric rose despite the rising Omicron-variant cases. The University of Michigan’s final consumer sentiment rose to 70.6 during December, up from the preliminary estimate of 70.4 and 67.4 in November.