Live Data Indicates The Future Of Retail

As countries start executing their quarantine exit strategy from the COVID-19 crisis, business owners want to know what current consumer sentiment means for the future of physical retail
the future of online retail according to data collected
Nadav Roiter - Bright Data content manager and writer
Nadav Roiter | Data Collection Expert

DISCLAIMER: The opinions expressed in this article are those of its author. They do not imply endorsement of any medical institution, physician, or research facility. Please do not substitute the information in this article for real medical or professional advice. If you have a COVID19 question or problem, please contact a physician or visit the CDC Website.

The U.S. economy in numbers: From February to March eCommerce took center stage pushing physical retail behind the scenes

Coronavirus launched the economy into an eCommerce shopping frenzy. By March 15th, 23% of American consumers admitted to purchasing products online which they had previously purchased at physical retail locations

Shift in the purchase of products online normally bought in-store in light of coronavirus in the United States as of March 15, 2020

graph of peoples buying habits before and after the pandemic started

By the end of March the number of American consumers who expected to increase their online shopping habits hit 37%!

In fact, data collected in a joint effort by  Bright Data (formerly Luminati Networks) and QuickLizard was able to shed light on a major consumer shift online which will most likely last way after the coronavirus pandemic has passed. Some of the most attention-grabbing stats include:

– A 15% increase in senior citizens who started shopping online when compared with the same period a year prior.

– A YOY increase of 900% in the sales of electronics was observed, and in large part attributed to one of history’s largest work-from-home experiments.

– The U.K. experienced a 500% YoY increase in online grocery sales while the U.S. saw a mind boggling YoY upwards trend of 800%!

luminati (now Bright Data) and quickLizard How Social Distancing is reshaping online retails - electronic and IT - cooking appliances grocery shopping in US bread machines in US pet supplies indoor sport in israel INTERESTING FACTS after initially flattening at the beginning of the pandemic, wedding and engagement ring sales have begun to rebound

Do you expect to spend more or less on goods from online marketplaces because of the coronavirus?

bar graph on if people expect to spend differently online after the pandemic started

Needless to say, many bricks and mortar retailers were spooked by these eCommerce-facing trends with a whopping 47% of American business owners expecting COVID-19 to have a negative impact on their retail revenue streams.

What are your financial expectations for your retail business relative to the coronavirus?

bar graph of financial expectations for their retail business by owners
Image Source: Statista

And the truth of the matter is that retailers’ fears were not in vain. According to Statista, many retail sectors in the U.S. saw a significant drop in sales between February and April. Most notably:

– Clothing stores saw a decrease of 50.5% in retail sales

– Furniture, motor vehicles and hobby items saw an average decline of 25%

– Electronics saw a decrease of 15%

At the same time, the Bright Data and Quicklizard data insights project saw similar negative online trends with consumers focusing mainly on essentials. Based on this research photography equipment sales dropped 55 percent YoY, and sunglasses and reading glasses faced a 50 percent reduction in sales as well.

Impact of COVID-19 on monthly retail sector sales in the U.S. from February to March, 2020

covid 19 impact on retail sales by sector
Image Source: Statista

What narrative is live data telling us about the future of in-store retail?

Bright Data in collaboration with QuickLizzard, have partnered in order to piece together a snapshot of consumer sentiment in countries around the world who were exposed to COVID-19 before the U.S. and as such are on a shorter path to an exit strategy. This data may very well be able to serve as a good indication as to the future retail climate in America as well as other late blooming countries as far as COVID-19 economic healing is concerned.

Live data regarding Germany, the Nordic countries and Israel indicate changes in consumer shopping trends

For consumers in Israel, Germany and the Nordic countries, April 2020 showed an increase in online shopping tendencies when compared with March 2020. Consumers in these countries continued to buy their groceries, and electronics online. However, as the calendar turned to May and retailers started resuming operations, we witnessed a decline in online sales.

In fact, electronics retailers in Germany, the Nordic countries, and Israel:

– Experienced a 10% decrease in online sales between the last week in April and the first week in May.

– Home office equipment, including laptops, showed a 20% decline, while profits in printers dropped by about 9%.

– Groceries also experienced a drop in online sales, as consumers headed back to stores.

The logical conclusion: After being locked down for months, consumers want to physically go to stores and return to normal.

Online sales going back down after lockdowns end

Israel, which lagged behind other countries in online sales, is seeing higher volumes of grocery sales than other places, although electronics are still being purchased online at a higher rate today than before the pandemic, possibly indicating the lasting effects of coronavirus on long term shopping habits.

In Germany and the Nordic countries, consumers are heading back to stores but at a slower pace than customers in Israel. In the former countries, when we compare sales between May 2020 to May 2019, in-store shopping is about 50% of what it was a year ago. May online shopping decreased by 30% year over year, and was not compensated by in-store shopping.

retail takes hit across the board - in store shopping and retail sales stagnate

Pet stores, which were considered essential, stayed open throughout the lockdowns, but consumers did most of their pet food and product shopping online. May has shown a 10% decrease in online shopping revenue and a 15% decrease in the number of items sold.

This possibly indicates: that bricks and mortar operations stand to suffer a lasting decrease in foot traffic and revenues while some eCom sectors stand to suffer, at least in the short term, due to a decline in consumer’s level of disposable income.

These statistics serve as a strong indication of a possible consumer-driven recession. Many people have lost their primary source of income and fear a second wave of coronavirus outbreak which may be leading them to hoard their disposable income to help them weather the plausible next phase of the storm.

Consumer panic buying and stockpiling is on the decline

Toilet stockpiling became the butt of many jokes and even an entire website ( dedicated to helping consumers decide how much toilet paper they really need in order to survive the apocalypse.

toilet paper calculator joke app

But in truth, essentials stockpiling or its decline, for that matter, is actually indicative as to the core consumer’s state of mind. In early March, hand sanitizer sales were up 800% compared to the same period a year prior. By early May, these sales were up a ‘mere’ 345%. Over that same period, toilet paper sales were still up 81% compared with sales figures for that same period a year earlier, yet down significantly from its February, and March peaks.

The logical conclusion: Consumers overbought a lot of products when the lockdowns first began. However, now they are seeing that manufacturers have caught up with supply, and they don’t need to stockpile a year’s worth of essential products. Also, the general effects of stockpiling may very well be a negative impact on sales for essentials (both online and offline) as consumers have enough to last them months in advance putting these industries at high risk in the short term.

sharp decline in stockpiling as manufacturers catch up with supply

Summing it up

As many countries, economies, and businesses are feeling around in the dark trying to find their way out of the coronavirus cave, real-time data is the only real beacon of light. Speculation, and/or historical trends have proven worthless in the face of this unprecedented pandemic which is why businesses need to understand and act on what is actually happening!

Nadav Roiter - Bright Data content manager and writer
Nadav Roiter | Data Collection Expert

Nadav Roiter is a data collection expert at Bright Data. Formerly the Marketing Manager at Subivi eCommerce CRM and Head of Digital Content at Novarize audience intelligence, he now dedicates his time to bringing businesses closer to their goals through the collection of big data.