Consumers are buying less while shopping online more
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Americans are spending less right now — retail sales were down more than 8% in March, and economists expect a steeper decline in April.
Meanwhile, more of what consumers are buying comes at the click of a mouse or the touch of a smartphone screen.
The Marketplace-Edison Research Poll found that 4 in 10 consumers who were already shopping online for groceries or other goods before the pandemic are now doing it more.
“We do a lot of Amazon and online shopping anyway, and I would definitely say it has increased for sure,” said David Blevins. He lives in Clarksville, Tennessee, with his wife and three kids. He owns a Chick-fil-A franchise that’s been open, and busier than ever, since the pandemic hit.
Blevins said shopping in person right now “is a hassle — either they’re not open or stores have limited hours.” Shopping on the internet, he said, “you don’t have to get out of the house. My wife’s trying to stay in the house with the kids as much as possible. It’s driving her crazy, actually.”
The rise in online shopping is likely to persist post-pandemic, said retail analyst Camilla Yanushevsky at CFRA Research.
“The survey data says that even when the stay-at-home orders are lifted, people still want to avoid public places.”
Yanushevsky points out that with online shopping, it’s easy to compare prices and save.
“It allows the consumer to be more frugal,” she said. “Grocery stores and other retailers spend a lot of marketing and analytics to spur impulse purchases, especially around the checkout counter.”
Frugality is a high priority right now, said Robert Farrokhnia at Columbia Business School. In a recent National Bureau of Economic Research working paper, “Income, Liquidity and the Consumption Response to the 2020 Economic Stimulus Payments,” he and colleagues examined how families at different income levels are spending their $1,200-$2,400 federal pandemic stimulus checks.
For those at low- and middle-income levels who have little savings in the bank to provide an emergency financial cushion, Farrokhnia said, households are spending primarily on “nondurable goods: food, pharmacies, supermarkets and so on. And there are very few expenditures on durable goods — washing machines, cars, appliances or electronics.”
According to the Marketplace-Edison Research Poll, those making less than $25,000 a year are the least likely to have shopped online before the pandemic and to have shifted to online shopping now.
COVID-19 Economy FAQs
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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