2022 – In-store shopping returns and thrives. Here’s why

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.

Amazon (AMZN) She said she added too much storage capacity when she was struggling to meet pandemic demand and was overcrowded in some cases. The company is now said to be subletting some storage space to get rid of the excess capacity.
Companies like stitch repair (SFIX) They fight. The online clothing design service is set to lay off 15% of its paid jobs — about 330 employees — as e-commerce growth slows. The cuts come months after Stitch Fix cut full-year guidance and said active customers were below expectations.
Carvana (CVNA), the online used car dealership, will lay off about 2,500 employees, or 12% of its workforce. In cities, many startups that promised to replace groceries in the corner with deliveries of groceries and necessities in less than 15 minutes, are starting to fall back.

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.

In the second quarter of 2020, e-commerce sales as a percentage of total retail sales jumped more than four percentage points to 16.4%.

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.

“We have seen a marked shift in consumer shopping behavior between channels, with better-than-expected in-store sales and lower-than-expected digital sales,” Messi (M) CEO Jeffrey Jennett said in a call with analysts last month.

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.

Neeraj Shah, CEO of the online furniture retailer Weaver (W)Analysts told last month that the “pendulum” has returned to in-person shopping after a surge in online purchases in 2020.

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