E-commerce isn’t new. Shopping online has been in vogue with the arrival of Amazon and free second-day shipping. But with a pandemic leading consumers to question crowded malls and in-store transactions, the e-commerce alternative with curbside pickup helped spike online revenue 20% in 2020 from 2019, according to Mastercard CEO Michael Miebach.
Pre-pandemic industry estimates had pegged e-commerce to grow by about 16.5%. Mastercard said that from Oct. 11 through Dec. 24 online sales grew 49% compared with 2019.
Speaking Jan. 12 on the virtual CES 2021, Miebach said he doubted consumer in-store retail patterns would return to pre-pandemic trends even with a vaccine.
“Years of digital acceleration have been kind of compressed into months,” Miebach said. “That’s a seismic shift.”
The executive said that going forward consumers would likely continue purchasing online due to the steps taken by retailers and Amazon, among others, to make purchasing as easy as a few clicks — with free shipping. Miebach said consumers would return to stores for product advice before making a purchase.
“If you want to go to a shop and you’re going to talk, you get great advice from the guy that you know in your — in your local town,” he said. “But repeatable purchases where you don’t really have any advantage by being in a shop, why wouldn’t you do what you just started to learn throughout the crisis? So about two-thirds will retain. That’s our view.”
With a six-days-shorter winter holiday period this year compared to 2018, retailers pushed earlier discount pricing in stores and online, which resulted in record e-commerce sales and a 3.4% increase in overall consumer spending (excluding autos), according to new data from Mastercard.
Online transactions increased nearly 19% from a year ago and accounted for nearly 15% of overall sales for the period from Nov. 1 through Dec. 24.
“E-commerce sales hit a record high this year with more people doing their holiday shopping online,” Steve Sadove, senior advisor for Mastercard and former CEO of Saks, said in a statement. “Due to a later-than-usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices.”
Department stores saw overall sales decline 1.8% and online sales growth of 6.9%, emphasizing the importance of omnichannel offerings. Electronics and appliances were up 4.6%, while the home furniture and furnishings category grew 1.3%.
E-commerce continues to drive retail, accounting for 15.4% of Black Friday (Nov. 28) and 24.5% of Cyber Monday (Dec. 1) consumer spending, respectively.
Top online retailers included Walmart, Amazon and Target — all drivers of packaged-media (including DVD/Blu-ray Disc) sales.
Holiday sales from before Thanksgiving through Christmas increased 5.1% to more than $850 billion this year — the strongest growth in the last six years, according to the Mastercard SpendingPulse report, which covers overall retail spending trends across all payment types, including cash and check.
Online shopping also saw large gains of 19.1 percent compared to 2017, according to the report, which details holiday shopping from Nov. 1 through Dec. 24.
“From shopping aisles to online carts, consumer confidence translated into holiday cheer for retail,” said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Inc. “By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels.”
Poor weather did pose an issue during some primetime shopping periods, the study found. This included cold weather on Black Friday morning on the East Coast and wet weather conditions the weekend of December 15-16 on both the East and West coasts. Also, storms Dec. 21 in the East with storms impacted the final run of the season.
The findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check.