Let’s go to the mall! Or the grocery store! Or Target! Or literally anywhere that isn’t in front of a computer, where we can look at, touch, and buy some things! That’s what consumers are increasingly saying, and doing, according to recent reports.
In particular, in-person shopping has been rebounding since late 2021. That is, in mid-2020, at the peak of the COVID-19 lockdowns, online sales as a percentage of all U.S. retail reached 15.7 percent. But by the end of 2021, it had returned down to 12.9 percent, about where it was before the pandemic.
According to a report from the Mastercard SpendingPulse retail data analytics firm, online sales were lower in March 2022 than in March 2021, which represents the first year-over-year decline in online retail sales since November 2013. In-person retail sales, meanwhile, were up 11.2 percent.
Those numbers are (apparently) still growing, with retailers anticipating even better days to come. Seventeen percent more people visited indoor malls in March 2022 than the year before. Even more visited open-air lifestyle centers and outlets. In 2021, for the first time in four years, retailers opened more physical stores than they closed.
These trends might be great news for retailers, but what they really need is a clear sense of why consumers are back at the store, picking out their own broccoli, instead of just clicking for home delivery, like they have been doing for the last couple of years. Anecdotal evidence suggests that many shoppers simply like what they get more, because they have selected it themselves. Plus, analysts observe, after being at home for so long, for many people, it feels good to just go out and interact with the world, whether in stores, malls, airplanes, or restaurants, just as long as it is somewhere different.
But a list of the retail chains undergoing the greatest expansions—Dollar General, Five Below, Off-Price, Citi Trends, and Costco—also suggests another reason. Considering that Dollar General opened 2,160 new stores in 2021 and planned for more in 2022, and Costco announced its plans to expand by about 60 stores, it appears that for some shoppers, the goal is less the interaction and more the deal. In uncertain economic times, discount retailers still may offer the best options to customers looking to stretch every penny, rather than pay for the convenience of at-home deliveries or be forced to spend more to get free shipping.
Discussion Questions:
- Why are shoppers returning to brick-and-mortar stores?
- Do you think that the majority shoppers will make their purchases online, in person, or some combination of the two in the years ahead?
- Which types of products lend themselves more to in-person shopping, and which are better bought online?
Source: Peter Rudegeair, Charity L. Scott, and Sebastian Herrera, “The Pandemic Was Supposed to Push All Shopping Online. It Didn’t,” The Wall Street Journal, April 16, 2022; Thomas Hum, “‘The Mall Is Not Dead’ Amid Rise in Online Shopping, Retail Expert Says,” Yahoo, April 14, 2022; “U.S. Retailers Opened Twice as Many Stores as They Closed,” Retail Bum, March 28, 2022