The unprecedented social and economic disruptions that affected all areas of life in the US in 2020 also skewed many of our pre-pandemic forecasts. Valuable insights can be gleaned by examining the difference between what we thought would happen as of February 2020 versus what we now project for this year and the coming years.
Due to widespread commercial lockdowns and quarantine-related personal restrictions, US consumers overwhelmingly reduced spending on services and entertainment this year (restaurants, bars, salons, travel, events, education, etc.). This in turn led to an unexpectedly strong outcome for spending on certain retail goods, as households used the suddenly available cash to splurge on consumer electronics, home furnishings, groceries, and a range of other products. Much of this spending took place online.
Perhaps the most consequential digital story of 2020, the widespread embrace of ecommerce during the pandemic unexpectedly accelerated the channel’s progress by almost two years. In January, we forecast total ecommerce sales would be $674.88 billion in 2020; now we have that figure well over $100 billion higher, at $794.50 billion. On the flipside, in-person shopping took a massive hit.