Instead, consumers seem tired of ordering everything from the sofa and are back to their old shopping.
“After the pandemic subsides, you see consumers returning to their pre-pandemic activities,” said Brian Nagel, director of retail at Oppenheimer & Co. “Consumers see benefits from in-store shopping.”
He said that several factors conspire to limit the growth of online sales.
Inflation puts pressure on consumers’ wallets. This has led some shoppers to refrain from purchasing large discretionary items such as electronics and furniture – products often bought online – or to resist delivery charges.
Other consumers have proven eager to go out and socialize after confining themselves to the house during the pandemic.
“Shopping in stores is a social activity,” Nagel said.
Signs of this shift in consumer preferences are everywhere.
Online retail sales rose 2.2% in May compared to the same month last year, according to payments data released by Mastercard on Tuesday. In-store sales grew faster by 13.4%.
E-commerce stocks have been the worst-performing retail sector in the S&P 500 so far in 2022, falling 28% Monday, according to S&P Global.
Experts expect more layoffs.
“Many of these companies have been hired in anticipation of the expected growth,” said Berna Brashai, an analyst at Empire Financial Research. “Now they will miss those expectations. The obvious answer to the lack of growth targets is to reduce, contain and reduce costs.”
Reflection of the year 2020
This trend is a sharp reversal of the rush to online ordering in the early stages of the pandemic. This overturned expectations that the consumer shift to online shopping would always be.
Two years ago, when the Covid-19 virus brought daily life to a standstill, online shopping skyrocketed.
With nonessential stores closed and orders placed to protect the home, shoppers of all ages were buying groceries, home office supplies, furniture, sports equipment and other goods online in record numbers — some for the first time.
The companies have hired staff to meet demand, expanded their distribution facilities, and partnered with delivery services such as Instacart and DoorDash.
But with stores reopening in the summer and fall of 2020, the reversal has begun. Consumers rushed to the malls, decorated their wardrobes and made long-awaited purchases.
Online sales still make up a larger portion of retail sales than they did before the pandemic. However, it has steadily declined from its peak in spring 2020.
The best companies say they are finding more shoppers returning to stores.
Jeanette said customers come to stores to buy formal wear, such as dresses for parties and social events. At the same time, they pulled out of buying casual clothes online.