I remember the year I started shopping online regularly. It doesn’t seem that long ago. I recall seeing friends getting distinctly Amazon-logoed packages and asking me what I bought on Amazon.com. Today, in the middle of a Coronageddon, my adopted spirit animal is the estivating African lungfish: I—along with most U.S. and worldwide consumers—am belt tightening in view of a serious worldwide recession. But, I still buy a lot of my trademark lawyer survival equipment and supplies on Amazon.com. Apparently, others are acting similarly. Online sales are surging.
Amazon.com’s recent 2020 first-quarter results report a 26% increase in net sales over the first quarter of last year. (Amazon.com sales represent about 50% of all United States E-commerce.) Also, against the backdrop of recession/depression, Amazon has hired around 175,000 full and part-time workers to keep up with orders.
Visa’s Chief Product Officer Jack Forestell said this week that Visa is “seeing a massive acceleration toward e-commerce adoption.” Visa saw an 18% rise in U.S. digital commerce spending in April, as face-to-face transactions fell 45%. Online sales trends seen in countries like the United States are even larger in more developing economies. For example, 13 million Latin America Visa cardholders made e-commerce transactions for the first time ever during the March quarter—that’s roughly 20% of Visa cardholders in the region.
U.S. Commerce Department
Today the U.S. Commerce Department reported that while U.S. retail sales sank a record 16.4% in April, receipts at internet retailers jumped 8.4%. Viewed from another perspective, while overall retail spending in April was down more than 20% from the same month last year, online retail was up by more than 20%.
To provide some broader context for the accelerated online sales, in the two years prior to the onset of the recent pandemic, E-commerce in the United States grew between around 13% and 15% annually. Prior to the pandemic, E-commerce was forecasted to reach over 12% of all retail sales in the United States.
In short, the current crisis is clearly speeding growth up the growth of online sales. It will be interesting to see if consumers form long-term habits to support this trend afterwards. In any event, there is plenty of room for online sales growth. So, online and Amazon.com sellers: take heart, stay safe and be appropriately dangerous.
Attribution, in part, to Emily Bary, Marketwatch.com, Visa sees ‘massive’ digital acceleration with missions trying e-commerce for the first time, May 13, 2020