eCommerce

How The Stage Was Set For The Pandemic’s Great Digital Shift

online shopping payment

It may feel like the pandemic has always been here.

That there was no “before” this — before the worry about microbes, social distancing and sheltering in place.

And it may seem that we’ve always done what we’ve needed to do online — work from home, learn from home, and of course, bank and shop from home.

But if the “great pivot” and the “great shift” (we’ll use the terms interchangeably) to digital seemed seamless, borne of urgency and necessity, it’s only because the stage had been set for it to be so.

Setting The Stage

There were (and still remain) jumping-off points where we had already been using some tech conduits to transact and interact. As Karen Webster detailed in a column titled “The Big Jump,” eCommerce had been chugging along at a roughly 15 percent growth rate for about a decade, entering this new decade (the 2020s) poised for the same steady progress.

Steady, steady and then the big jump, which came with an abrupt tailwind, which in turn came from lockdowns and businesses shuttering.

Now it certainly is the case that we’ve needed to go online to shop when brick-and-mortar avenues simply were, and are, no longer an option. But even as far back as February, when the rumblings of a new virus seemed far away from U.S. shores, brick-and-mortar retail was already suffering.

“Consumers are firing brick-and-mortar retailers from the jobs they held years and decades before,” wrote Webster in a separate story.

Amazon is only a headline in this long-running tale, but with next-day delivery (and with other huge eCommerce firms following suit), 7,000 stores were closed in 2017, up 200 percent from the year before, and most recently, in 2019, 9,300 stores closed.

Analysts had been predicting that 75,000 stores will close through the next half-decade. Along the way, the percentage of eCommerce/total retail sales has jumped from less than 2 percent at the beginning of the millennium to a much more significant current standing above the 10 percent mark as of 2019, per U.S. Census Data.

To transact digitally, you need hardware, PYMNTS reported at the beginning of this year, 5.1 billion of the 7.3 billion people across the globe have a mobile phone. That’s roughly 67 percent of the population — and in five years, that will grow to 71 percent. According to the GSMA, 79 percent of those users will own a smartphone.

Along with the hardware, software remains important, and in particular, apps and flexible platforms are making all the difference in the great digital shift. That’s a nod to Uber, Apple, Google and Microsoft as all of them are finding the opportunity to foster sticky relationships with consumers and cross-sell a range of services (with Uber being a prime example here).

Crossing The Rubicon

And now we’ve crossed the Rubicon. PYMNTS’s own data, with a survey across 12,000 consumers, shows that (with a bit of extrapolation), 12 million more people ordered groceries online between March 6 and April 27 than had been seen at the beginning of the year.

That’s just a microcosm of the wider trend. And even as the reopening of the economy looks set to continue, albeit gradually, the great digital shift will remain firmly entrenched. Late last month, we found that nearly two times as many Americans have little or no interest in leaving their homes to reengage in the physical world as those who do. To drill down into the numbers, about 28 percent of U.S. consumers said they are “very” or “extremely” interested in venturing beyond the homestead, while 51 percent said they were “slightly” or “not at all” interested. Those mindsets were uniform across demographics.

With the trepidation to go back to the way it was, the shift to online continues. As many as 39.2 percent of consumers shop for retail goods online more often than they did on March 6, the first day of our study. And 70 percent of those surveyed say they will want to continue to work from home if possible.

Among those who are now shopping more online, only one-third say they will go back to physical stores to shop when they reopen. In the latest study, published earlier this month, of the 42 percent of consumers who have shifted more of their purchases online, more than half of them, at about 23 percent (of the total), said that their digital habits will stick.

“Crises and pandemics can be crucibles of innovation,” Webster wrote in “The Big Jump.” “… People have more time to gestate new ideas and come up with innovations that can change our lives. And they see new opportunities as a result of the disruptions all around them.”

What’s next lies on the horizon, even as we continue to navigate the rapids of the great shift to digital.

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