Gordon Reid discusses Visa and Mastercard
E-commerce, already on a tear before the pandemic, will capture one out of every five dollars spent in the U.S. this holiday season, according to a new survey from Mastercard SpendingPulse released Wednesday.
That’s up from 14 per cent of sales last year, highlighting just how central online shopping has become in 2020. It’s great news for stores with robust digital operations -- e-commerce sales from Oct. 11 to Christmas Eve are expected to spike 35 per cent -- but a blow to brick-and-mortar, particularly department stores and apparel sellers that traditionally get a quarter of their annual sales in November and December alone. Increasingly, retailers like department stores also benefit from online sales.
“As we’ve gone into a COVID world, the consumer has become more digital,” said Steve Sadove, senior adviser for Mastercard and former chief executive officer of Saks Inc. “It’s not just direct-to-consumer companies. Don’t think of it just being Amazon.”
Online shopping for the holiday season has already begun, and with a vengeance. Amazon.com Inc. pushed its Prime Day to October from July, and many retailers like Target Corp. and Walmart Inc. countered with their own round of cyber deals. Overall retail sales during that initial week rose 8.3 per cent compared to the same week last year, with e-commerce sales soaring 67 per cent, said Mastercard, which tracks sales in its own payments network as well as estimates for purchases made with cash and checks.
While digital demand will skyrocket, overall retail sales for the 75-day-long holiday period are expected rise just 2.4 per cent. Still, that’s far better than the 3.5 per cent drop recorded during 2008, during the last U.S. recession.