Amidst an ongoing pandemic that has forced consumers and businesses to dramatically alter the way they transact, the U.S. Census Bureau’s second quarter retail eCommerce sales estimates show that the eCommerce share of all retail trade leapt up to 16.1%.
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For more than a decade, eCommerce has made up a growing share of retail sales. From 4.2% during the first quarter of 2010, online shopping grew to account for 11.8% of retail trade by the first quarter of 2020 — less than a 0.2 percentage point increase per quarter during that time. This most recent quarterly jump would have taken more than five and a half years based on the old trend.
Part of this increase can be attributed to the drop in in-person sales as a result of social distancing guidelines and shelter-in-place mandates. However, the same Census data from the second quarter of 2019 shows that eCommerce retail sales have risen 44.5%. This compares with an average year-over-year increase of 14.6% over the past five years.
The pandemic has rapidly accelerated trends in eCommerce that have been building for years. This dramatic swing away from in-store transactions and toward eCommerce will ebb, as it becomes easier and safer to transact in person again. However, we will not return to where we were before the pandemic.
Based on Square payments data, of the retail businesses that continued operating throughout the pandemic, the share that had accepted an online payment went from 38% in February, before the pandemic, to 51% in July.
Consumers shopping at these businesses have responded in kind, with online orders more than doubling during this same time and more than quadrupling in April, at the height of shelter-in-place mandates.
Businesses that have recently added online purchase options will likely not revert to operating models that don’t include eCommerce once the pandemic is under control, as consumers will continue to expect these options to be available.