We’ve seen how e-commerce has skyrocketed because of the pandemic, but recently, there has been even more news confirming it.
The IBM US Retail Index released on Monday shows that coronavirus has accelerated e-commerce growth by five years, with an accompanying detrimental effect on brick and mortar stores. In the first quarter of 2020, department store sales declined by 25%, followed by a 75% contraction in the second quarter. Overall, the report expects retail sales at department stores to fall by 60% this year. Earlier this month, we reported that Amazon is in talks with the Simon Property Group to use department store space for its distribution centers.
According to IBM, clothing sales have fallen, but groceries, home improvement, and alcohol sales are up by 12%, 14%, and 16%, respectively.
The report coincides with news that e-commerce sales at Walmart rose 97% in the second quarter. The big box retailer earned $137.74 billion in the second quarter, while net income rose to $6.48 billion. Walmart currently offers same day delivery at 2,730 stores and grocery pick up at 3,450 locations.
Going forward, the company plans to roll out Walmart+ in the near future. The membership program will compete with Amazon Prime by speeding up deliveries for customers, among other perks.
Walmart isn’t the only retailer profiting from shifts in spending. Target reported that same day services jumped by 237% in the second quarter. Amazon posted a record quarterly profit and 40% sales growth from April to June.
Suffice it to say, e-commerce has been having a moment. Census Bureau data shows that online sales grew 31.8% year over year, to reach $2.115 billion in the second quarter. Not only that, but e-commerce accounted for 16.1% of total retail sales in the three month period, up from 11.8% in the first quarter of 2020.