Retail Trends to Pay Attention to in Charts
If there was a phrase to describe the retail sector it would be….there’s never a dull moment. From eCommerce’s dramatic rise during the height of the pandemic to its fall from grace it’s hard to predict what’s next. As we close out another year it’s a good time to take a look back at the trends taking over the turbulent retail sector.
1. Retail sales in November in the United States declined by 0.6%, the greatest drop in close to a year. “A surprisingly weak retail print indicates that the Fed’s rate hikes are starting to bite. With Powell signaling at the Dec. 13-14 meeting that the Fed is not done raising rates — and with consumers shifting their spending from goods to services, which largely aren’t captured in the retail-sales report – the weakness could persist in the new year,” said Anna Wong and Eliza Winger, economists at Bloomberg.
Source: Bloomberg
2. eCommerce growth. During the height of the COVID-19 pandemic eCommerce sales soared causing companies like Amazon and Shopify to ramp up hiring believing the growth was here to stay. But consumers had other ideas, it turns out they enjoy shopping in stores more than many realized and in categories like clothing the share of online sales now are lower than before the pandemic. Many eCommerce companies including Amazon, Shopify and Wayfair have laid off workers this year signalling that the eCommerce boom is over.
Source: Bloomberg
3. The top eCommerce retailers. When we think of eCommerce in North America we think of Amazon, but in Asia the first name that comes to mind is Alibaba. Three of the top five eCommerce companies in the world are Chinese companies which explains why so many eCommerce innovations come out of China.
Source: eMarketer
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4. eCommerce growth by region. South East Asia has the countries with the fastest eCommerce growth in the world. You will notice that more mature eCommerce markets like China and the United States did not make the top ten list.
5. eCommerce returns. The volume of returns are increasing and retailers are struggling to figure out how to manage the cost of those returns. It can cost a retailer between $10 to $20 per order to process a return and this cost does not include shipping. To combat rising costs retailers are taking several steps including reducing previously long return windows and charging for mailed in returns.
Source: eMarketer
6. Consumer financial challenges. Millennials are struggling financially with 48% of millennials saying they are living paycheck to paycheck. That means we should not be too surprised that more and more consumers are turning to discount stores like Walmart are Dollar General to stay afloat.
Source: Bloomberg
7. Consumer priorities. If you are wondering what your customers are thinking about, it’s likely their mental and physical health and their finances. If you are looking for ideas to better serve your customers then consider opportunities in these areas.
Source: Nielsen
8. Holiday spending patterns. When the deals are out consumers tend to flock to clothing and accessory and electronics stores.
Source: Nielsen
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