Pandemic Accelerates Americans’ Use of Digital Commerce
The COVID-19 pandemic has drastically transformed how consumers behave in the economy, notably through the rising adoption of digital commerce technology. A recent survey from consulting firm McKinsey & Co. found that three out of four people have tried new shopping methods during the pandemic, and these changes are likely to become permanent.
Because so many consumers have become open to e-commerce, many businesses have stepped up their digital services.
“You see significant movement on both sides, and that has to result in a significant increase, a fundamental shift in acceleration,” said Brian Ruwadi, a senior partner at McKinsey.
The Wall Street Journal noted that the transition to e-commerce has caused some businesses to thrive, while others have failed due to the broader economy’s K-shaped recovery. Online retailers are thriving; for example, Peloton Interactive Inc. stated that its revenue more than tripled to $757.9 million with Americans’ hesitancy to join or use fitness centers. Alternatively, 2020 is on pace for record liquidations and bankruptcies, and retail-store closings reached a record in the first six months of the year.
“People are realizing the time they save and the money they save,” said Emily Kennedy, president of Marinus Analytics, an artificial-intelligence company. “Once they get it, they’re reluctant to give it back later on.”
While digital spending habits will likely become permanent, some changes in what consumers spend money on may be temporary. Many Americans still avoid indoor dining, air travel, and entertainment, spending 7.2 percent less on services in the third quarter than in 2019. Purchases of goods, however, increased 6.9 percent over the same period.
The pandemic has also propelled increased use of contactless payment methods that eliminate the need to use a physical credit card. In Mastercard’s third quarter, the company revealed that 41 percent of global in-person transactions were contactless, up from 30 percent in 2019.
