Are brick and mortar purchases dead? Thanks COVID-19

There has long been a trend of retail purchases increasingly moving online, and the coronavirus pandemic has magnified that trend. More people are either being forced to, or are electing to conduct more of their purchases online as the coronavirus pandemic shutters brick-and-mortar retail nationwide, and many Americans have been ordered to stay home.

An April 2020 study by PYMNTS.com analyzed survey responses from 3,477 customers to understand how consumers are using digital tools to shop and save online and in-store. There were 2,062 usable responses. Respondents must have owned a smartphone and made a commercial purchase in one of five product categories. The analysis compared purchasing behavior in March 2020 to March 2019.

According to the report, the proportion of consumers who reported shopping and paying for retail purchases online increased from 41.8 percent to 56.4 percent from 2019 to 2020. Unsurprisingly, in-store purchasing decreased 42.2 to 32.1 percent.

Walmart is dominating online grocery sales, while Amazon takes the cake for non-grocery retail purchases for non-essential items like clothing and electronics. According to the report, 8.7 percent of consumers made their most recent purchases on Amazon.

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Consumers who are shopping in-store are also relying more heavily on their mobile devices for savings. According to the report, “The share of consumers who used their mobile phones to look up coupons and discounts increased by 7.6 percentage points between 2019 and 2020, while the share who used them to gain loyalty credit increased by 8 percentage points.” The majority of these shoppers used their phones to look up discounts for groceries more than other types of purchases.

Of course, much remains to be seen about the long-term effects of this pandemic. The survey was conducted on March 17 and 18, not long after COVID-19 was declared a pandemic. This was also around the time many of the stay-at-home orders took effect in the United States. The timing of the survey could very well reflect panic purchases in response to the rapidly evolving news of the month. Consumer purchase data will both be more interesting and more useful later in the year after stores reopen to see if these changes in consumer behavior persist.

As the influx of information and peddling of data analysis saturates the 24 hours news cycle, it behooves consumers and businesses to be critical of fast survey reports. Just because the information is formatted in a snazzy deck does not mean it deserves to be taken at face value.

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