US Retail and eCommerce – The Impact of COVID-19 One Year Later 2021
“Most signs are pointing to the worst of the pandemic being in the past, with pent-up demand for normalcy and renewed optimism poised to drive the industry forward. More than…

US Retail and eCommerce – The Impact of COVID-19 One Year Later 2021

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Report Summary

Providing the most comprehensive and up-to-date information and analysis of the Retail & eCommerce market including the behaviors, preferences, and habits of the consumer.

COVID-19 has indeed wreaked havoc on the retail industry, but the market is already rebounding and re-emerging with force, embracing new changes as it moves forward. The pandemic has essentially rapidly accelerated efforts that were already in place, including initiatives such as curbside pickup, more personalized shopping services, and increased integration of technology.

eCommerce has also been boosted to a point where half of consumers (and two thirds of Millennials) are making more than 50% of their purchases online. While some shoppers are heading back to stores now that the pandemic situation is improving, others will hold on to their newfound habits and routines that include a heavier dose of digitization in all shopping aspects.

Retailers will face challenges related to improving profitability, as most are now investing in tools, tech, partnerships and people to better position themselves for the future. Aggressive discounting strategies also remain prominent throughout the industry, which will put extra pressure on the bottom line. This, and increased costs from investments and those related to managing fulfillment of accelerated online orders means that retailers will take a more aggressive approach to looking for economies of scale across their businesses.

Despite ongoing challenges, retailers are being presented with a multitude of opportunities to better connect with customers based on their current and predicted priorities. Consumers are very value-focused and will continue to display caution relative to how they shop and spend. Retailers and brands will play a very important role in making consumers feel safe, supported and appreciated, both personally and financially. Key opportunities include enhancing personalized services and other offerings and bringing mission-driven initiatives more to the forefront.

Read on to discover more about this US Retail & eCommerce market report, read our US Online Grocery Retailing Market Report 2021, or take a look at our other eCommerce & Online Shopping and Retail research reports.

Quickly understand

  • The impact of COVID-19 on consumer behavior and the retail industry, inclusive of ecommerce.
  • How a recession, and now a recovery economy, is impacting consumers’ approach to prioritizing their expenditures.
  • How consumers are shopping across channels by category.
  • Which retailers are winning, and which are struggling.
  • The types of promotions consumers prefer and how this might evolve.
  • Key drivers of retailer preference.
  • Top areas of interest as it pertains to tech at retail.

Covered in this report

Brands include: Poshmark, ThredUp, Lululemon, Nike, Walmart, Fast Co, Amazon, Credo Beauty, Ralph Lauren, Glow Recipe, Huda Beauty, BareMinerals, Credo Beauty, Disney, H&M, Macy’s, Gap, Best Buy, Kroger, Nordstrom Rack, Nordstrom Local, Aldi, Burlington, Foot Locker, Fabletics, L’Oréal, Garnier, NYX Professional Makeup, TikTok, BuyBuy BABY.

Expert analysis from a specialist in the field

This report, written by Diana Smith, a leading analyst in the Retail & eCommerce sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Most signs are pointing to the worst of the pandemic being in the past, with pent-up demand for normalcy and renewed optimism poised to drive the industry forward. More than a year after the onset of COVID-19, the retail industry has emerged to be in a place of strength. New protocols, services and shopping opportunities have already emerged, and much more innovation and technology will continue to shape the landscape looking ahead.

Diana Smith

Associate Director, Retail & eCommerce

Table of Contents

  1. Overview

    • What you need to know
    • This Report looks at the following areas
    • Definition
    • Market context
    • Economic and other assumptions
    • COVID-19: US context
  2. Executive Summary

    • Top takeaways
    • Market overview
      • Figure 1: Total US retail sales and fan chart forecast, including ecommerce, at current prices, 2015-25
    • Impact of COVID-19 on retail and ecommerce
      • Figure 2: Short-, medium- and long-term impact of COVID-19 on retail and ecommerce, June 2021
    • Opportunities and challenges
    • Look inward to crystalize company values
    • Look outward to partnership opportunities
    • Offer products and services linked to wellbeing
    • Dimensionalize the meaning of value
    • Move beyond transactional to personal
  3. The Market – Key Takeaways

    • The pandemic’s uneven start resulted in varying levels of impact
    • Spending patterns mirror the economy’s drop and rebound
    • Retail industry is strong and resilient; set to keep posting gains
  4. COVID-19 Pandemic Overview

      • Figure 3: Daily trends in number of COVID-19 cases in the United States reported to CDC, Jan. 22, 2020-May 19, 2021
    • January-March 2020: discovery and first wave
      • Figure 4: Number of COVID-19 cases in the United States reported to CDC, by region, Jan 22, 2020-May 19, 2021
    • April-July 2020: uneven lockdown and uneven impact as cases climb
    • August 2020-January 2021: new leadership, a new variant and first vaccinations
      • Figure 5: COVID-19 vaccinations in the United States, Dec 13, 2020-May 20, 2021
    • February 2021 onward: double masking and the road to reopening
      • Figure 6: Projected dates for vaccination coverage, as of May 19, 2021
  5. Market Impact on Retail and eCommerce

    • Economic indicators
    • A record drop and bounce back in economic activity
      • Figure 7: US GDP percent change from previous period, not seasonally adjusted, 2007-25 (forecast)
    • Employment plummets, recovers to 2016 levels; retail is especially challenged
      • Figure 8: Unemployment and underemployment rate, January 2007-April 2021
      • Figure 9: Initial jobless claims, January 13, 2007-May 15, 2021
      • Figure 10: Employment levels, by industry – Manufacturing, wholesale, retail, transportation/warehouse sectors, March 2001-March 2021
    • Consumer spending and confidence are catching up
      • Figure 11: Real personal consumption expenditures and change in personal consumption expenditures, Q1 2007-Q1 2021
      • Figure 12: Personal savings rate, monthly, January 2007-March 2021
      • Figure 13: Consumer Sentiment Index, January 2007-April 2021
    • Federal Reserve promises to keep interest rates “near zero”
      • Figure 14: Effective Federal Funds Rate, January 1990-April 2021
    • Inflation concerns grow as economic growth accelerates
      • Figure 15: Consumer Price Index change from previous period, January 2007-April 2021
      • Figure 16: US gasoline and diesel retail prices, January 2007-April 2021
    • Global computer chip shortage ripples throughout the economy
    • Household finances and spending priorities
    • Financial wellbeing is improving, despite only half of Americans thinking their financial situations are healthy
      • Figure 17: Financial health, by household income, April 29-May 13, 2021
    • Stimulus relief has been a lifeline for many
      • Figure 18: Financial situation, by household income, April 29-May 13, 2021
    • Essential goods remain priorities…
      • Figure 19: Coronavirus spending habits, March 31-April 17, 2021
    • …but discretionary categories show signs of rebirth
      • Figure 20: Coronavirus spending habits – Higher priority, April 16-24, 2020-March 31-April 17, 2021
    • Savings remains a focus, but consumers ready to make exceptions
      • Figure 21: Spending behaviors – Past three months and future plans, May 2021
      • Figure 22: Spending behaviors – Past three months, May 2020-May 2021
    • Policy impacts
    • Vaccine rollouts force retailers to implement their own mask mandates
  6. Market Size and Forecast

    • Industry continues to post gains, but pace of growth will decelerate
      • Figure 23: Total US retail sales and fan chart forecast, including ecommerce, at current prices, 2015-25
      • Figure 24: Total US retail sales and forecast, including ecommerce, at current prices, 2015-25
    • Elevated ecommerce levels expected to outlast pandemic
      • Figure 25: Total US retail ecommerce sales and fan chart forecast, at current prices, 2015-25
      • Figure 26: Total US retail ecommerce sales and forecast, at current prices, 2015-25
      • Figure 27: eCommerce share of total sales, 2015-25
  7. COVID-19 Scenario Performance

    • Mintel’s approach to predicting the impact of COVID-19
    • Fundamental differences in how COVID-19 is affecting consumer markets
    • Rapid recovery benefits stores over ecommerce and vice versa for extended disruption
      • Figure 28: COVID-19 scenario forecasts for the total retail market, including ecommerce, 2015-25
      • Figure 29: COVID-19 scenario forecasts for ecommerce, 2015-25
    • COVID-19 market disruption: risks and outcomes
      • Figure 30: Summary of Mintel scenario expectations and the impact on the retail and ecommerce market, June 2021
  8. Companies and Brands – Key Takeaways

    • Essential retailers dominated, but opportunities emerged for specialists
    • Retail reinvents itself – again
    • Customer service means more than ringing a cash register
  9. Retail Winners and Losers

    • Essential versus nonessential retailers
      • Figure 31: Shopping at specific retailers, April 2021
    • eCommerce grows grocery sales, but challenges profitability
    • Circular retail boomed in 2020
  10. Market Opportunities

    • Look for next level omnichannel opportunities
    • Bringing the in-store experience online
      • Figure 32: Walmart acquires virtual fitting room start-up Zeekit
      • Figure 33: Credo Beauty promotes personalized consultations and classes
      • Figure 34: Ralph Lauren offers virtual shopping experience
    • Consider the evolving role of the store
      • Figure 35: Nordstrom Local concept expanded in California
      • Figure 36: Foot Locker power store concept expanded in Canada
    • Have a POV on pricing and product consistency across channels
      • Figure 37: Attitudes toward consistency across channels, by gender and age, April 2021
    • Leverage social media as an ecommerce tool
      • Figure 38: Attitudes toward shopping on social media, by generation, June 2020
      • Figure 39: Instagram adds new Drops feature
      • Figure 40: L’Oréal partners with TikTok to test new ecommerce tools
    • Re-think the meaning of value
      • Figure 41: Feed it Forward grocery store
    • Equip sales associates with the necessary tools to get personal
      • Figure 42: Attitudes toward personalization, by gender and age, April 2021
      • Figure 43: L’Oréal promotes innovations that drive personalization
  11. The Consumer – Key Takeaways

    • Sharp shift from stores to online
    • Pandemic underscores importance of omnichannel retailing approach
    • Essentials thrived, while the pandemic challenged specialists
    • Malls losing strength, not all will make a comeback
    • Cleanliness and contactless emerge as retailer drivers
    • Shoppers want immediate savings and free shipping
    • Investing in the next normal means investing in tech
  12. Overall Consumer Mindset

    • Fear is subsiding one year after pandemic lockdowns
      • Figure 44: Share of adults worried about coronavirus exposure, March 2020-May 2021
    • Lifestyle concerns follow suit
      • Figure 45: Share of adults worried about coronavirus impact on lifestyle, March 2020-May 2021
    • The pandemic experience inspired reflection
    • Family first
    • New view of health and wellness
      • Figure 46: Post COVID-19 priority changes, May 2021
    • Masks still provide a level of comfort despite new guidelines
      • Figure 47: Level of comfort with activities, May 2021
  13. Channel Shifting

    • Consumers shift to less in-store, more online
    • Two thirds of Millennials do the majority of their shopping digitally
      • Figure 48: Percentage of total purchases made online, by generation, April 2021
    • Online shopping frequency rises
      • Figure 49: Online shopping frequency, March 2020 and April 2021
    • Computers remain most common device for online purchases, but mobile shopping is the future
      • Figure 50: Device used when shopping online, April 2021
      • Figure 51: Device used when shopping online, by generation, April 2021
  14. Shopping Method by Category

    • Consumers are still prioritizing essential items, but signs of stabilization begin to emerge
      • Figure 52: Products shopped for, March 2020, December 2020 and April 2021
    • Multichannel shopping is the norm
      • Figure 53: Multichannel shopping versus single-channel shopping, by category, April 2021
    • Multichannel shopping declined amid pandemic for most categories as more people shopped only online, but it’s rebounding
      • Figure 54: Multichannel shopping by category – Trended, March 2020, December 2020 and April 2021
    • eCommerce is bright spot for all categories
      • Figure 55: Where purchases occurred – By channel, by item, before and amid COVID-19, March 2020 and April 2021
    • Store for buying, online for searching but there are some exceptions
      • Figure 56: Method of shopping, select categories, April 2021
  15. Retailers Shopped

    • Value-based retailers win share, specialists struggle
      • Figure 57: Retailers shopped, April 2021
    • Essential retailers benefited in-store from open doors, while specialists see a boost online
      • Figure 58: Specific retailers shopped – In-store vs online and frequency, April 2021
    • Amazon gained new shoppers, solidified its presence
      • Figure 59: Retailers shopped online and frequency, by age, April 2021
    • Secondhand marketplace grows with young women big advocates
      • Figure 60: Retailers shopped – Secondhand retailers, by gender and age, April 2021
  16. Shopping at Malls

    • Pandemic punch might be final blow for many malls
      • Figure 61: Mall visitation comparison levels, April 2021
      • Figure 62: South Coast Plaza’s The Pavilion
      • Figure 63: Open-air shopping centers outperform indoor spaces during pandemic
    • COVID-19 kept shoppers away; now they need a good reason to return
      • Figure 64: Reasons for not visiting malls or going less, April 2021
    • A third of adults visit malls to curb boredom
      • Figure 65: Reasons for visiting malls, April 2021
    • Future outlook for malls is grim
  17. Retailer Drivers

    • The basics still matter…
      • Figure 66: Retailer drivers, April 2021
    • …and so does going beyond the basics
      • Figure 67: Retailer drivers, by generation, April 2021
    • New drivers emerge because of COVID-19
      • Figure 68: Retailer offerings in light of COVID-19, April 2021
  18. Meaning of Value

    • Consumers view free and fast as the most valuable
      • Figure 69: Meaning of value – NET, April 2021
    • Older consumers want to save money, younger consumers want more flexibility
      • Figure 70: Behold shopping app style quiz
      • Figure 71: Meaning of value – Select factors, by age, April 2021
    • Conscious consumers see value in sustainable options
      • Figure 72: Meaning of value – Sustainability, by gender and age, April 2021
      • Figure 73: Adidas and Allbirds partner on sustainability initiative
    • Fast and free shipping and returns are key for Hispanic shoppers
      • Figure 74: Meaning of value – Select factors, by Hispanic origin, April 2021
  19. Preferred Types of Promotions

    • Consumers prefer to save on the current purchase
      • Figure 75: Preferred promotions, April 2021
    • Young adults have an interest in promotions that incentivize shopping
      • Figure 76: Preferred promotions, by gender and age, April 2021
      • Figure 77: Wayfair Way Day promotion
    • Parents are less particular, prefer what’s available
      • Figure 78: Preferred promotions, by parental status, by gender, April 2021
      • Figure 79: buybuy BABY teams up with @Feed on charitable effort
    • Multicultural shoppers prefer simplified promotions
      • Figure 80: Preferred promotions, by race and Hispanic origin, April 2021
  20. Usage of and Interest in Emerging Technologies

    • Retailers should educate the masses on how to shop smarter with tech
      • Figure 81: Usage of and interest in emerging technologies, April 2021
    • Tech savviness at retail matters most to younger shoppers
      • Figure 82: Usage of and interest in emerging technologies, by gender and age, April 2021
    • A closer look at select technologies
    • Contactless payments
      • Figure 83: Amazon one pay-by-palm technology
    • Augmented and virtual reality
    • Digital screens
    • Fit technology
    • Wayfinding technology
    • Livestream shopping events
      • Figure 84: Walmart and TikTok host Holiday Shop-Along Spectacular
  21. Appendix – Data Sources and Abbreviations

    • Data sources
    • Sales data
    • Forecast
    • Consumer survey data
    • Abbreviations and terms
    • Abbreviations
    • Terms
  22. Appendix – The Market

      • Figure 85: Total US retail sales and forecast, including ecommerce, at inflation-adjusted prices, 2015-25
      • Figure 86: Total US ecommerce sales and forecast, at inflation-adjusted prices, 2015-25
  23. Appendix – COVID-19 Scenario Performance Methodology and Assumptions

    • Scenario performance
      • Figure 87: COVID-19 scenario forecasts for total retail sales, including ecommerce, 2020-25
      • Figure 88: COVID-19 scenario forecasts for ecommerce retail sales, 2020-25
    • Rapid COVID-19 recovery, central and extended COVID-19 disruption scenarios outline
    • Scenario methodology
  24. Appendix – The Consumer

    • Supporting data
      • Figure 89: Shopping behaviors amid COVID-19, April 16, 2020-February 10, 2021
      • Figure 90: Products shopped for – Trended view with percentage point differences, March 2020, December 2020 and April 2021
      • Figure 91: Furniture and home furnishings stores – Monthly percentage change in sales, 2019-April 2021
    • Trend drivers

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