As states start reopening across the country, Keith Jelinek looks at the post-pandemic landscape in the retail market. What lessons did retailers learn over the past year? What should they do as shoppers return to stores?
The National Retail Federation (NRF) is projecting up to 8.2 percent retail growth in 2021 as Americans look to spend post-pandemic. But about half of that growth is projected to be from online sales. What does the end of the pandemic mean for traditional bricks-and-mortar?
KJ: The NRF projections feel on target—especially with vaccinations progressing and state and local authorities lifting social-distancing restrictions. I think we can comfortably say two things about the rest of 2021: Customers are returning to in-person shopping, and they’ll continue to do a lot of shopping online after getting more comfortable doing so over the past 14 months. Baby boomers, in particular, embraced online shopping as part of broader efforts to stay in touch with the outside world.
That said, as we look at the early 2021 numbers, context is important. In some cases, we should compare what’s happening now with 2019, as opposed to the low points of 2020. According to Mastercard’s early read of March sales, specialty apparel was up 61 percent over 2020 and nearly 19 percent over 2019. Department stores were up 114 percent compared with 2020, but flat compared with 2019. There also are early indications that consumers are buying accessories and more casual dress-up items, compared with more “comfy and casual” items at the height of the lockdown.
But, judging by the March numbers, the NRF is right about online’s place in all of this. Online sales were up 56 percent over 2020 and rose nearly 86 percent over 2019. This is another sign that even as consumers return to physical stores, they have become more confident and comfortable with online purchasing, and retailers and consumer goods companies have stepped up their communications—i.e., targeting them with more personalization.