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April 7, 2021
E-commerce, a Covid Lifeline for Retailers with Additional $900 Billion Spent Online Globally, says Mastercard Recovery Insights.
Infographic: Consumers are increasing their e-commerce footprints, buying from up to 30% more online retailers.
Photo: Retail. Garments Shop. Image Credit: Roman K.
As Covid-19 kept consumers worldwide at home, they purchased nearly everything from groceries to gardening supplies online. According to Mastercard’s latest Recovery Insights report, this amounted to an additional $900 billion spending in retail online around the world in 2020.
For retailers, restaurants, and other businesses large and small, selling online provided a much-needed lifeline as in-person consumer purchasing got disrupted.
Roughly 20-30% of the Covid-related shift to digital globally is expected to be permanent, according to “Mastercard’s Recovery Insights: Commerce E-volution.” The report draws on anonymized and aggregated sales activity in the Mastercard network and proprietary analysis by the Mastercard Economics Institute. The research dives into what this means by country, sector, goods & services, within countries, and across borders.
“While consumers got stuck at home, their dollars traveled far and wide thanks to e-commerce,” says Bricklin Dwyer, Mastercard chief economist and head of the Mastercard Economics Institute. “This has significant implications, with the countries and companies that have prioritized digital continuing to reap the benefits. Our analysis shows that even the smallest businesses see gains when they shift to digital.”
While the digital transformation has been neither universal nor consistent due to geographical, economic, and household differences, the report uncovers several critical overarching trends:
Early digital adopters go into overdrive: Economies that were more digital before the crisis, such as the UK and US, saw more significant gains in the domestic shift to digital. That shift looks more permanent than the countries with a smaller share of e-commerce before the crisis, such as Argentina and Mexico. Asia Pacific, North America, and Europe were the most vital regions in driving e-commerce adoption.
Grocery and discount store digital gains look sticky: Essential retail sectors, which had the smallest digital share before the crisis, saw some of the most significant improvements as consumers adapted. With new consumer habits forming and given the low pre-Covid user base, we anticipate 70-80% of the grocery e-commerce surge to stick around for good.
International e-commerce rose 25-30% during the pandemic: International e-commerce got a boost in sales volume and the number of different countries where shoppers placed orders. With infinitely more choices at their fingertips, consumer spending on international e-commerce grew around 25-30% year over year from March 2020 through February 2021.
Consumers increase their e-commerce footprints, buying from up to 30% more online retailers: Reflecting expanded consumer choice, Mastercard’s analysis shows that consumers worldwide are making purchases at a more significant number of websites and online marketplaces than before. On average, residents in countries like Italy and Saudi Arabia are buying from 33% more online stores, followed closely by Russia and the UK.
Shift to electronic payments accelerated in the US: Even in stores, Covid-19 accelerated the transition to digital—with more consumers moving from plunking down cash to touch-free payments. According to Mastercard’s analysis of payment forms at brick-and-mortar retail stores and restaurants, non-cash payments jumped by an additional 2.5 percentage points beyond the ongoing trend. It led to an acceleration of the shift from cash to electronic payments by a full year.
Mastercard launched Recovery Insights last year to help businesses and governments better manage the health, safety, and economic risks presented by Covid-19. The initiative utilizes Mastercard’s analytics and experimentation platforms, its longstanding consulting practice, and unique data-driven insights to deliver relevant and timely tools, innovation, and research.
The report draws on anonymized and aggregated sales activity in the Mastercard network and proprietary analysis by the Mastercard Economics Institute.
Source: Mastercard
|GlobalGiants.Com|
Edited & Posted by the Editor | 6:25 AM | Link to this Post
