This one chart...COVID accelerates online retail sales
It was 1998. My friends and I would book the one computer that was connected to the internet at our local computer shop - 4:00 pm, after school. Enough time for us to order chips from the fish n chip shop across the road, lick our oily fingers and wipe them dry on our grey school trousers. We would then cross the road to what would be the most fascinating yet most confusing 10 minutes of the day - to surf the net. It would cost $10 for 10 minutes - and it was the slowest thing ever. Yet we would not know it at the time. I think that computer store is now a kebab shop - I must confess, I have not been.
Three years before we headed into that computer store, Amazon was selling books online to all 50 states of the US and to 45 countries around the world. In 2000, the tech-wreck wiped out 80% of the technology sector's market capitalisation. In the seven years leading up to the tech-wreck, the percentage of households in the US owning computers increased from 15% to 35%.
Fast forward 22 years after the computer store visit, and here we are. Globally, computer ownership sits at around 50%. In fact, more than 250 million Americans will make an online purchase this year.
Prior to the COVID pandemic, online retail sales in the US accounted for around 11.3% of total sales. This is surprisingly low, although retail sales include car sales, fuel purchases, and grocery store sales. Today, online sales accounts for 16.1% of all retail sales - US$212 Billion in three months ending June 2020.
As consumers were faced with lock downs and restrictions, many turned to online shopping. And retailers adopted. In three months, online sales increased by 43% - previously it took 5 years to do the same. You can see from the above chart the steady increase of online sales, and the steep rise since COVID.
I believe we have brought forward the gains in online sales that we would have otherwise seen in the years to come. The better the technology allows us to shop online, the more efficient the transportation process becomes, the more we will see consumers shopping online. Remember click and collect? Remember the death of shopping centres? Could my grandparents imagine self checkouts at the local grocery store? Could you have imagined checking out of a grocery store without having to checkout?
It's really difficult to make predictions, especially about the future. Yet I'm super optimistic about human beings' ability to advance.