Omnichannel Shopping Comes of Age
The ongoing shift toward online shopping and away from physical stores accelerated during the early months of the pandemic, but old habits die hard
The pace of in-store shopping is growing gradually as sales shift back a bit from online to brick-and-mortar stores. The stay-at-home advisories, store closures, and other pandemic restrictions that pushed consumers to do a lot more online shopping last year subsided this year as vaccination rates increased and people started venturing back into the world again.
In fact, in July of this year, e-commerce sales growth rate fell below in-store sales growth rate for the first time since pandemic restrictions became widespread in the U.S. last year, shown by our Checkout service, which tracks and reports actual consumer receipts. In 2020, total discretionary retail sales grew 9%; the e-commerce channel contributed 87% of that growth. Moving into 2021, the retail sector continued expanding — year-over-year sales grew 13%. However, in-store sales contributed 61% of that growth.
Retail Revenue Growth Contribution
in-store formats have experienced strong year-over-year growth this year
Source: The NPD Group, Checkout, 2021.
Although online sales growth has slowed this year compared to last, online sales are still 38% higher than in July 2019, before the pandemic. Most in-store formats experienced strong year-over-year growth, especially convenience stores and gas stations, department stores, restaurants, specialty apparel and footwear, and beauty.
Average Spending Per Shopping Occasion
Total U.S. Retail Industries/In-store and Online
Source: The NPD Group/Checkout
The pandemic spending lift continues
The pandemic has created a lift in the average amount U.S. consumers spend on each shopping occasion – in-store and online. So far this year, spending per occasion has remained elevated near 2020 levels, which is partly due to a general shift toward online purchasing, where average selling prices (ASPs) and the average amount spent already tended to be higher. There has also been an increase in purchasing behavior related to stocking up as consumers try to limit in-person contact at retail stores.
Checkout data shows the average number of shopping occasions per week through July 2021 still fell short of 2019 levels. Fewer shopping occasions, combined with supply challenges creating shortages of retail products, have spurred consumers’ willingness to spend more in the moment, to get what they can now. This dynamic alters the cadence of seasonality and creates less price sensitivity.
Leading into the holiday shopping season, we can expect to see consumers spending more on better products, with fewer items under the tree. Reduced shopping frequency and the continued strength of online shopping will once again weaken the typical role of in-store impulse shopping. The pandemic will continue to influence not only what consumers buy, but also where they buy, how much, and when.
Other interesting omnichannel findings from Checkout …
Several industries hit hard early in the pandemic continued to show growth in July 2021. Accessories, apparel, footwear, beauty, and foodservice have continued to post very strong year-over-year comparisons since March 2021.
Total purchase occasions, measured by per capita receipts, show slight year-over-year growth for each week of July 2021. The in-store channel led growth every week.
Spending per buyer in all household income groups increased in July 2021, compared to last year, driven primarily by expansion of in-store spending.
A proprietary consumer purchase panel provides crucial, receipt-based insight into buyer behavior
Checkout data from NPD offers a clear view of what consumers are buying and where — across all traditional retail channels, marketplace platforms, and direct-to-consumer outlets. Based on an industry-leading methodology, Checkout transforms purchase details from receipts into useful market data and insights. It offers a more granular look at the retail market from the consumer’s point of view, complementing the retail tracking information provided to us by retailers.
Our unique position as a supplier of point-of-sale purchase data results in unparalleled knowledge of precise, category-level sales volumes in the industries we track, both in-store and online. Members of the Checkout receipt panel use a smartphone app to snap photos of in-store receipts and share e-commerce receipts directly from their email inboxes, chronicling their purchases across industries, categories, channels, and retailers.
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What’s Driving Games Industry Growth
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Drilling Down with Checkout
Greater understanding of the macro-level omnichannel shifts in the U.S. retail industry can also help retailers better navigate the pace of change and direction for particular industry segments. Read further to see how Checkout information from NPD sheds light on what’s happening in specific vertical markets.
Executive Director, Industry Analyst
As in-store shopping experiences have become available, sports consumers are reverting to shopping in physical stores. Checkout, complemented by point-of-sale data, provides some key insights.
Checkout shows 83% of U.S. consumers who purchased outdoor footwear, performance footwear, and sport-leisure footwear did so in brick-and-mortar stores between April and June of 2021— a 17-point increase over the same period in 2020.
The average selling price (ASP) for this type of footwear increased nearly 20% year over year, to reach $67. (Online ASP was relatively stable, increasing only 1.4%.) The in-store ASP improvement is a direct result of more high-end retailers reopening stores this year. Between March and June last year, many of the stores that remained open were larger mass retailers that were deemed essential business; specialty outlets and high-end retailers were largely closed due to stay-at-home advisories across the U.S.
For active pants, active shorts, sports jerseys, sweatpants, sweatshirts, and other active-apparel categories, 84% of buyers purchased in-store between April and June 2021, an 8-point increase over 2020. The ASP increase for this type of apparel was $40, growing 31% over the same period last year. Online prices increased just 6%, reaching $54.
The growth of in-store retail is also occurring in outdoor accessories, camping equipment, paddle sports equipment, climbing gear, and other sports equipment. Our Retail Tracking Service shows sales of this type of equipment declined by 22% in the three months ending June 2021, compared to last year. At the same time, brick-and-mortar outlets experienced healthy growth. For store-only purchases for these categories, outdoor specialty retailers have shown the greatest strength, growing 51% year over year.
Director, Industry Analyst
The pandemic added new online apparel consumers who were accustomed to shopping this very “touch and feel” category within the physical store. After these new consumers were over the hurdle of trying online shopping (especially in the Baby Boomer age bracket), it opened a door to a new way of shopping. While e-commerce might not be the method of choice for all their apparel shopping needs, it does provide consumers more options while they spend more time at home – especially if they have positive shopping experiences.
Compared to last year, we continue to see more buyers shopping online, buying more frequently, and spending more each time they shop. And while in-store shopping might not be growing as fast as online, it is still growing — and it continues to be the primary method consumers use to shop for clothing.
Apparel shoppers clearly showed their love of physical stores as they returned to in-store shopping this spring. Access to vaccines, the drop in case counts (at the time), and increased comfort with being out in the world sent in-store sales revenue higher than any time since the pandemic’s onset. That said, a new level was also set for online shopping — especially because new COVID-19 variants could disrupt this in-store momentum — showing how important it is for the two channels to work together.
For example, newer concepts, like live-streaming and virtual try-on options, could help consumers discover apparel items even before they enter physical retailers’ doors. Curbside delivery and online pick-up can also help elevate in-store convenience. Combining efforts to make shopping, online and off, a seamless process is the goal, especially as we head into another unusual holiday season.
Vice President, Industry Advisor
As in-store, pandemic-related challenges have receded this year, much is different in technology retailing. However, some core long-term truths remain the same.
One major difference is that there has been a significant shift in the mix of channels that represent the online market. In-store retail has apparently permanently shrunk, as a percentage of tech revenue — accounting for approximately 42% of revenue over the past five quarters — but this change was aligned with the long-term, ongoing retail trend that started long before the pandemic began, with consumers moving away from brick-and-mortar stores and toward online purchasing.
But perhaps the most impactful change is what the composition of that 58% of online sales looks like. In 2019 before the pandemic, that number was heavily weighted toward online retailers. However, since COVID-19 restrictions were instituted across the country in 2020, we have seen significant shifts toward manufacturer-direct and third-party retailer online sales as consumer purchasing decisions have shifted online. As with the overall shift, some of this was in play pre-pandemic, but the situation accelerated rapidly over the past 15 months.
While this change in online channels has been dramatic, one part of the market that has not changed is the product mix (on a revenue basis) in the stores. One of the most important product changes during the pandemic has been online sales growth among the top five hardware categories (i.e., notebooks, desktops, TVs, tablets, and headphones). This shift did not, however, affect the importance of these categories in brick-and-mortar stores. In stores, the share of sales revenue that depends on those categories has barely changed at all, accounting for approximately 45% of in-store revenue in 2019 before the pandemic, in 2020 during the first year of the pandemic, and so far in 2021.
Executive Director, Industry Analyst
In July 2021, at the start of the back-to-school season in the U.S., office supplies buyer penetration increased compared to the previous two years. This rise was led by brick-and-mortar stores, as more consumers purchased office and school supplies for home, office, school, and creative needs, shown by our Checkout data.
The average amount spent per shopping trip in physical stores in July 2021 returned to $16, which is the same size it was in 2019, before COVID-19 hit the U.S. The amount spent per buyer in stores stayed above 2020 levels but declined compared to 2019, which indicates consumers are going back to stores to purchase school supplies again after a primarily virtual school year in 2020. Online, the average amount spent during an online shopping occasion increased from $16 in 2019 to $21 in July 2021. Per-buyer spending increases were driven by home organization, working form home, and business-related categories like storage, glues and adhesives, and pens. Office supplies sales online continue to grow year over –year. Online penetration of retail has settled in at 18% after hitting 21% of dollar share in 2020. The ongoing online volume growth indicates there could be room for share growth in the future.
Higher-income consumer segments have grown the fastest this year. Spending by households with incomes of $100,000 and higher rose 31%, year over year in July 2021. Spending by those with incomes between $75,000 to $99,999 grew 12% in the same period. Approximately half (47%) of spending within these two income segments came from households with children. This highlights the complex mix of consumers and needs office and school supplies sales at the beginning of summer and in the back-to-school season.