After an abysmal spring of family quarantining and work-from-home Zoom meetings, the American retail economy eventually saw a late summer revival. Total retail sales in each month of the third quarter were, on average, 3.6% higher than last year. However, continuing social distancing restrictions pushed retail sales out from the mall and onto the internet. Online shopping increased Amazon’s total global revenues from consumer retail sales by 33% in the third quarter alone. That was a record $53 billion of revenues earned in just one quarter, with over 60% originating from U.S. shoppers suffering from interminable cabin fever.
Remarkably, the influence of the pandemic is affecting consumer sentiment about which merchants will earn their fewer shopping dollars. When Accenture performed their 14th annual Holiday Shopping Survey, they queried 1,500 American shoppers. Their survey revealed that Covid-19 has negatively affected the financial security of 22% of all Holiday shoppers, with 40% saying they plan to spend less overall this season. Nearly 60% expressed much less interest in shopping on Cyber Monday, be it from work or at home.
The pandemic has made consumers more concerned about the health and welfare of retail employees, with 76% expressing support for brick-and-mortar stores giving their workers Thanksgiving Day off to be with their families. Indeed, 61% said they are more likely to make purchases at companies that are committed to promoting employee welfare and safety during the pandemic. Their empathy was high enough that two in five consumers stated they would not shop at retailers that have furloughed staff or reduced their benefits due to the pandemic.
Both e-commerce and brick-and-mortar retailers are reacting to the pandemic as well. When Amazon moved its heavy-discount Prime Day from July to October of this year, their effort to minimize lost sales from a shuttered summertime economy generated ripple effects across the entire retail industry. News reports indicate that, in a move to mitigate the anticipated decline in holiday shopping, Target, Walmart, and other major retailers are no longer planning to wait until Black Friday to offer their best deals, whether on-line or not.
During these pandemic Holiday times, consumers appear to be more reflective of the welfare of others as they decide where to spend their reduced disposable incomes. Perhaps in this unique year, less spending will be more rewarding.