The broader retail sector in the U.S. could take years to recover from the impact of the COVID-19 pandemic, eMarketer has asserted, but e-commerce will be a bright spot.
Overall and including automobile and fuel revenues, the sales decline could be worse than that of the Great Recession, down 10.5% to $4.89 trillion this year versus the 8.2% drop in 2009. E-commerce is the bright spot, jumping 18% this year, as Americans rely on Amazon and other online retailers for necessities.
eMarketer estimates assume that widespread social distancing measures, which have gradually been lifted in May, will continue to ease and economic activity increase in Q3, the market research firm stated. However, consumer spending will likely remain dampened throughout the year, and in that case, total retail sales probably won’t rebound to 2019 levels until 2022.
Although insufficient to offset store declines, e-commerce has mitigated the severity of retail’s decline. E-commerce sales will advance 18% to reach $709.78 billion in 2020, eMarketer stated, reaching 14.5% of total U.S. retail sales this year.
The fastest growing e-commerce categories will be food and beverage at 58.5% and health/personal care/beauty at 32.4%, as Americans turn to online ordering for household essentials. Apparel and accessories, the second-largest e-commerce category in overall sales, will grow at a slower pace, 8.6%, according to eMarketer, as consumers shift spending from more discretionary, nonessential categories.
For the first time, Walmart will surpass eBay as the number two e-commerce retailer in the U.S. Still, new consumer purchasing patterns will have a number of specific effects this year and beyond.
“Amazon will increase its e-commerce market share to 38% and extend its reign of dominance,” said eMarketer principal analyst Andrew Lipsman. “But big-box retailers are leveraging their click-and-collect models to accelerate their e-commerce businesses. This will push Walmart into the number two position for the first time. Along with Target, Best Buy, The Home Depot and Costco Wholesale, Walmart is expected to grow e-commerce sales more than 35% in 2020.”