Mastercard SpendingPulse has released a new report that measures the extraordinary economic impact of COVID-19. Online retailers enjoyed a massive boost in that regard, with stay-at-home and social distancing orders leading to a $53 billion increase in e-commerce spending in the U.S. since they went into effect in April and May.
The report is part of a new Recovery Insight series. It revealed that the volume of e-commerce was roughly double what it was in 2019, accounting for 22 percent of all sales in April and May. The figure was only 11 percent for the same time period one year ago. Hardware stores and furniture outlets did particularly well, with year-over-year sales across all channels going up 36.2 percent and 7.5 percent, respectively. Those gains are not all that surprising since people were spending more time at home and had more time for home improvement projects.
Overall retail sales were considerably higher in May than they were in April, which likely reflects the gradual reopening process that took place in many parts of the country. Grocery stores have also done extremely well since the start of the pandemic. Year-over-year sales were up 9.2 percent in May, leading to the highest volume of sales that SpendingPulse has ever recorded for that month.
The trend was similar in the U.K., where people were spending more money on essentials and e-commerce accounted for 33 percent of all retail sales.
“The shift to digital shopping has been undeniable. Everything else has been incredibly unpredictable,” said Mastercard Senior Advisor Steve Sadove. “The question is what changes will stick around for the long-term. Investing in your home and shopping local are two recent trends. Heightened demand for touchless services is another, which could have tremendous impact on what stores look like and how they blend their online and brick and mortar footprints.”
Before the pandemic, Experian warned that many online retailers have not yet established a strong personal relationship with their customers. The Mastercard subsidiary NuData has since argued that those retailers will need to update their security practices and make their services more convenient if they want to retain customers once things return to normal.