In 2002, owing to the global pandemic, e-commerce spending surged by $900 billion, according to Mastercard’s newest Recovery Insights report, Recovery Insights: Commerce E-volution, published today (April 6).
Shopping through the online platforms acted as a life-saver for both small as well large businesses, retailers, and restaurants, when everyone was trapped inside their homes and normal consumer spending habits were put to a stop during the COVID-19 pandemic. E-commerce made up roughly $1 out of every $5 spent on retail, up from about $1 out of every $7 spent in 2019.”
Although this digital shift has been universal or consistent, due to household, economic and geographical differences, 20 to 30 percent of it, nevertheless, will become permanent. The shift becomes even more permanent in certain essential retail sectors: Grocery e-commerce could see 70 to 80 percent remain post-pandemic. And while it hasn’t been universal, it is a connected digital shift moving in every market, to some degree, dependent on the infrastructure.
“While consumers were stuck at home, their dollars traveled far and wide, thanks to eCommerce,” said Bricklin Dwyer, Mastercard chief economist and head of the Mastercard Economics Institute, in the report’s press release. “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.”
The most significant adoption of e-commerce trends was followed by North America, Europe, and the Asia Pacific. The shift to digital has also increased customer choice, opening the average customer up to international, as well as local, stores in a new way. Consumers are shopping at up to 30 percent more online retailers and marketplaces than before.
The Mastercard Economics Institute concludes that global sales activity has escalated and determined additional retail e-commerce spending based on trend deviations. The Recovery Insights initiative was launched last year enabling businesses and governments to assess the various risks introduced by the global pandemic using Mastercard’s analytics and experimentation platforms.