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Offline Stores Sales Decline By 75% in Q2 2020 as eCommerce Set to Grow By 20% in 2020

Nica San Juan
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As a result of the impact of the coronavirus outbreak, the shift from offline to online shopping has accelerated significantly. According to the research data analyzed and published by Stock Apps, department stores in the US reported a 75% decline in sales during the second quarter of 2020.

The IBM US Retail Index report reveals that the drop was a mere 25% during Q1 2020. For the full year, it estimated a decline of more than 60%. At the same time though, it predicted that eCommerce would by the end of 2020 record 20% growth.

According to the report, certain categories of goods accelerated in growth while others declined. For instance, with consumers schooling from home and working remotely, the clothing vertical has suffered a blow.

Men’s clothing is predicted to drop a massive -68.27% by the end of 2020, while women’s clothing is expected to drop by 50.25%. Children’s clothing, on the other hand, will experience the least drop, at -45.93%. Some of the categories expected to grow are alcohol at 16.28%, grocery at 12.97%, electronics at 19.96% and building (home improvement) materials at 14.15%.

On a global scale, Forrester predicted a 9.6% decline in retail sales in 2020, equivalent to a loss of $2.1 trillion. According to estimates, it will be at least four years before retailers rebound to pre-pandemic levels.

It points to a drop of 9.1% in 2020 in US retail sales compared to 2019 and in Canada, a 7.7% decline. Europe is expected to experience a greater decline of 10.5% across the EU-5 (UK, Italy, Germany, Spain and France.) While Asia Pacific is predicted to drop by 10% from 2019, Latin America is expected to have the lowest decline of 6.8%.


eCommerce Sales Increase by 31.8% in Q2 with 16.1% Retail Market Share

The situation in eCommerce is vastly different from physical retail according to a US Census Bureau report released in August 2020. Based on the data collected during the second quarter of 2020, it reports a 31.8% increase in retail eCommerce sales as compared to Q1 2020.

The total adjusted sales from eCommerce for the period amounted to $211.5 billion, out of a total retail sales figure of $1.31 billion. It was 16.1% of total retail sales and marked an improvement of 44.5% compared to the second quarter of 2019.

Comparatively, during Q2 2019, eCommerce accounted for only 10.8% of all retail sales, rising to 11.2% in Q3 2019 and 11.3% in Q4 2019. The uptrend maintained up to Q1 2020, rising to 11.8% before shooting to the Q2 2020 figure.


US eCommerce Sales to Jump 18% as Total Retail Sales Drop by 10.5% in 2020

According to eMarketer, total retail sales in the US in 2018 amounted to $5.31 trillion marking a 4.8% increase. In 2019, the figure rose by 2.8% to $5.47 trillion. The same report predicts a 10.5% drop in total US retail sales to $4.89 trillion this 2020.

Such a drop has not been seen since 2016 and also happens to be steeper than the 8.2% decline experienced during the 2008/9 recession. Worse still, the report predicts that the total retail sales will continue underperforming and may not rebound to pre-pandemic levels until 2022. The main reason behind the drop is offline retail, which is predicted to shed by 14% in 2020 to $4.18 trillion.

Even though it goes on to estimate that eCommerce sales will increase by 18% in 2020 to $709.78 billion, the uptrend will not offset overall losses. This is because it will only account for 14.5% of total retail sales.

It points to the fact that the apparel and accessories vertical is the second largest in eCommerce. But due to the consumer shift away from non-essential purchases, it is set to grow only by 8.6%.

Not surprisingly, according to a Kantar’s BrandZ report, UnderArmour was the fastest declining brand at the start of Q2 2020, reporting a 34% decline. The North Face, also an apparel company, was also in the top 10, with a 14% drop.

On the other hand, food and beverage is set to register above average growth, at 58.5%. Attesting to this, Walmart has attributed its eCommerce sales growth to an increase in online grocery orders. According to eMarketer, its sales will spike by over 35% in 2020 and it is set to overtake eBay as the second largest eCommerce retail store.

The report predicts that it will account for 5.8% of all retail eCommerce sales. Amazon will be in first place with a 38% share while eBay will be third with 4.5%.

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Nica San Juan

Nica San Juan

Nica is a BA Political Science graduate, startup founder and financial expert. She has an entrepreneurial spirit and started several startups from a young age, eventually becoming fascinated with stocks, cryptocurrencies and the blockchain economy. She specializes in financial tech and her expertise is in writing detailed tutorials and guides on how to invest in stocks and cryptocurrencies. Nica has written for many other websites, including Crypto Browser, Coin Review, LearnBonds, and Inside Bitcoins.