COVID Boosted eCommerce Sales Growth By 8%, According To Data

Analysts and commentators assert this, citing the consumer’s return to brick-and-mortar stores as proof of their declining interest in online purchasing. Specifically, they claim that the pace at which consumers purchase online has reverted to what would be anticipated in the absence of the pandemic — that the increased use of digital channels to shop by consumers was a temporary anomaly. In 2022, shopping is currently the same as it was in 2019.

Undoubtedly, the most critical use of eCommerce channels occurred in the second quarter of 2020, when eCommerce accounted for 16% of total sales. Since then, these levels have fluctuated, falling to 14% in the first quarter of 2022 and most recently rising to a seasonally adjusted level of 15% in the third quarter of 2022. Beginning in 2021, we have also witnessed an upsurge in using brick-and-mortar stores.

Incorrect is the assertion that the increase in internet commerce reflects longer-term, pre-pandemic tendencies than the consumer’s pandemic-induced dependence on digital platforms.

It is because,

The graphic below combines U.S. Census data, forecasts of eCommerce sales based on eCommerce share statistics from 2010 to Q4 2019 (the final quarter before the pandemic started), and Census data on eCommerce sales.

The proportion of sales through eCommerce is roughly one percentage point greater than it would have been if customers had not increased their usage of digital channels between 2020 and 2022.

Although one percentage point may seem minor, it represents $81.6 billion in eCommerce sales over the previous four quarters or a rise of 8% between 2020 and 2022, attributable to the growing usage of digital channels to make purchases. According to Census statistics, total retail sales over the last four quarters amounted to $7 trillion, with $1 trillion of these sales occurring through eCommerce.

These data and their findings are consistent across a range of statistical models and estimating techniques. The difference of one percentage point between the actual share of eCommerce sales and what they would have been based on predicted data is the same whether projections are based on seasonally adjusted or unseasonally adjusted data.

The same holds whether basic linear regression models (OLS) or regression models with robust standard errors are used.

Importantly, these findings also hold when using more complex statistical methods, such as Arima models, which are meant to forecast future data over some time.

Even when experts lower their predictions of physical shop closures, it is easy to forget that physical retail has been in a significant downturn since 2010, with substantial store closures each year, including 9,100 in 2019. Consumers may visit shops more often than they did during the epidemic, but they continue to use eCommerce more than they would have without the outbreak.

All of this suggests that conclusions about the reversal of eCommerce’s advances need a thorough analysis of the facts and instead leap to a conclusion contradicted by both the evidence and a shared sense examination of how people purchase. These numbers demonstrate that what we predicted about the epidemic boosting eCommerce growth has occurred.