KENNESAW, Ga. | Jan 28, 2022

By Robin Cheramie
Dean, Michael J. Coles College of Business

At the start of the pandemic when many retail stores around the country pivoted to curbside pickup or closed outright, there were big questions around how the industry would weather the storm. Now, almost two years later, while retail has definitely changed, the sector is actually performing better than ever.

According to data from the U.S. Census Bureau, year over year retail sales have continued to increase each month throughout the pandemic (with the exception of March and April 2020). People are spending considerably more in the retail and trade sector now than ever before. In December 2021 alone, retail sales were up 16.9 percent compared to the previous year, marking the 10th straight month of double-digit year-over-year growth.

Despite all the disruptions to supply chains, employment, and even to the ways people lead their daily lives, the pandemic has only increased people’s desire to spend their money on consumer goods.

One real change the pandemic brought – or at least accelerated – is a shift in how buyers interact with retailers. While the percent of retail sales coming from ecommerce has continued to grow for years, the pandemic has sent that number into overdrive. In Q3 2019, ecommerce represented 11.2 percent of all retail sales. In Q3 2020, that grew to 13.8 percent, and held steady in Q3 2021 at 13 percent.

This growth in online shopping can be seen in the reduced foot traffic at brick-and-mortar stores. A report from Sensormatic Solutions states that foot traffic in retail stores during the 2021 holiday season was down 19.5 percent compared to 2019. While buyers are eager to shop, they are becoming more eager to do so from their homes.

What does all this mean for the future of retail? A fascinating piece from McKinsey notes that most of the retail sector’s growth has been among specific kinds of retailers. Retailers specializing in home improvement, value-based retailers, and those with massive online footprints (including online-only retailers) were the big winners. Meanwhile, retailers catering to office workers or specializing in cosmetics suffered.

The pandemic has clearly led to an increase in retail sales, though it’s not been a boon enjoyed by all. Consumers’ tastes have changed – both in terms of what they want to buy and how they want to buy it. Whether a potential return to office work may equalize things a bit, the landscape will likely never return to 2019. If retailers want to succeed in 2022 and beyond, they are going to have to meet consumers where they are…which is increasingly on their phone screens.

 

Dr. Robin Cheramie is Dean of the Michael J. Coles College of Business at Kennesaw State University. She previously served as director for the Michael A. Leven School of Management, Entrepreneurship and Hospitality, and chair of the Department of Management and Entrepreneurship. Her work has appeared in Journal of Applied Psychology, Journal of Management, Journal of Vocational Behavior, Human Relations, Journal of Managerial Psychology, Career Development International, and International Journal of Physical Distribution and Logistics Management.