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Mastercard’s Recovery Insights report highlighted the scale of the pandemic-driven digital shift in 2020—as well as what to expect going forward.
Here are the big takeaways:
Global consumers increased online spending by $900 billion in 2020. This translates to ecommerce making up $1 for every $5 spent on retail in 2020, compared with $1 for every $7 in 2019. The surge in ecommerce spending was driven by pandemic-induced lockdown measures and brick-and-mortar store closures. Mastercard expects that 20%–30% of global ecommerce growth experienced during the pandemic will be permanent.
The online grocery sector experienced one of the biggest growth spurts. Currently, 9% of grocery shopping takes place online—up from 7% before the pandemic. Moving forward, Mastercard estimates that more consumers will shift to online grocery shopping, with 10% of grocery sales taking place online post-pandemic. Mastercard also expects that between 70% and 80% of the pandemic’s online grocery spike will be permanent.
Digital payments grew rapidly and will probably continue their ascent. Before the pandemic, the share of cash use as a portion of all sales declined roughly 2.5% per year. After pandemic restrictions took effect, noncash payments jumped an additional 2.5 percentage points beyond the trend—accelerating the shift from cash to digital payments by a full year.
The coronavirus pandemic has changed the face of retail, with brick-and-mortar seeing the biggest declines. Many consumers shifted to online shopping as a result of the pandemic, which hit brick-and-mortar retail hard: In 2020, approximately 15,542 US stores closed for good—well above the 9,879 and 5,700 stores that closed in 2019 and 2018, respectively.
To make up for in-store losses and maintain overall sales volume, many retailers put significant effort toward ramping up their digital presence—increasing online product assortments, …read more
Source:: Business Insider