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Target Corp. (NYSE:TGT) said yesterday that its digital sales jumped more than 140% from the same period of 2019. Earlier in the week, retailers from Walmart (NYSE:WMT) Inc. to Home Depot Inc (NYSE:HD). and Lowe’s Companies Inc. had reported increases in the range of 70% to 80%.
The pandemic has shut down business across the country, while health concerns and stay-at-home orders led many buyers to go online even for items that remain available in-store, such as groceries. The result: A sudden acceleration in America’s decades-long drift toward remote shopping.
“We’re seeing a massive rotation in consumer behavior toward e-commerce and home delivery,” said Michael Englund, chief economist at Action Economics. “The shift has been pretty dramatic.”
Whether it’s also durable will become clear as the economy reopens.
“It will be difficult to gauge how the landscape might evolve until all stores are open again and consumers have a chance to, if they choose, go back to their old ways,” said Stephen Stanley at Amherst Pierpont Securities.
Many local authorities are reluctant to push ahead too fast with the removal of restrictions, while uncertainty about the health risks remains high. And even where there’s a partial re-opening, there are often new rules — like limits on the number of shoppers in stores, or requirements for them to wear face-masks — that may deter some shoppers.
Target’s customers began returning to the physical stores in mid-April, Chief Executive Officer Brian Cornell said in an earnings call on Wednsday. Even so, he said, “our digital growth continued at unprecedented rates, up 200% to 300% above last year.”
Walmart Chief Financial Officer Brett Biggs said the company’s online pickup and delivery business had brought in new customers — notably including some older Americans who may not have done much online shopping before.
“We will see some bounce-back as lockdowns ease, but a large part of the shift to online shopping will be permanent,” said Mark Vitner, senior economist at Wells Fargo (NYSE:WFC) Securities. And that will accelerate the consolidation of brick-and-mortar retailers, he said. “We are likely to see a substantial number of stores close.”
©2020 Bloomberg L.P.
