Black Friday is behind us, but we still receive offers in our mailboxes. This year has been especially important for e-commerce, and giants in the industry reported unprecedented sales.
Considering that December is a “shopping” month and that the coronavirus still limits traveling and the time we spend outdoors, the likelihood is that the e-commerce gains in 2020 will continue. Take the U.S. e-commerce penetration and what the start of 2020 meant – the percentage of e-commerce in retail sales more than doubled in eight weeks. In comparison, it took a decade to grow from 5% to 10%.
The Impressive Rise of E-Commerce
Retail Sales are an important economic indicator. It shows the strength of the consumer, its ability to cope with the ups and downs in the business cycle and how resilient it is during economic downturns. Effectively, there is no economic recovery without the Retail Sales indicator rising. Even if an economy declines, if Retail Sales continue to rise, the chances are that the economy will experience only a mild recession.
While e-commerce’s astonishing rise is impressive, it does not mean that Retail Sales cannot decline. For instance, this Black Friday, the shopping in stores declined 52%, while shopping online surged 21.6% in the United States. Therefore, if the decline in shopping in stores exceeds the rise in online shopping, the Retail Sales indicator may actually show a decline.
Naturally, other factors are important here, like the size of the ticket, and so on. However, the main point this article tries to make is another. The rise in e-commerce in the United States shows the increased demand for online shopping throughout the world. When the U.S. leads, the others follow.
Thus, it explains a lot of why central banks are keen and in a hurry to introduce central bank digital currencies. With cash being used less, the need for a central bank digital currency becomes increasingly acute.
Of course, many may argue that the rise in e-commerce is transitory. Once vaccines begin to be rolled out, the trend comes back to its normal growth rate. That may be true, as at start, at least, people will love to be out more.
However, we should not forget that street shops and shops in malls declined for years and years before the pandemic. That trend will not go away easily. If anything, the pandemic made even the most reluctant customers use online shopping – and they probably loved it.