American Shoppers Return Despite Long-Haul Pandemic

The news is filled with the Omicron variant, which came sweeping through the nation at the most inopportune time, right before the holidays. On the heels of the Delta variant, many people have been forced back into isolation and quarantine. But for holiday shoppers, it was business as usual (and then some), and numbers were good despite the turbulent pandemic news. Americans are learning to live within the variants that keep popping out, and the shopping trends this holiday season bear that out.

The Show Must Go On

Last year, much of the world was locked down because of Covid-19, and people were not going out to brick and mortar stores. Because of this, online shopping soared, and companies like Amazon were taken to new heights. This year, shopping habits certainly changed again, but the numbers changed for the better, with a combination of in-person shopping and online retail purchases. When all was said and done, The Associated Press reported that holiday sales were up 10.7% when compared with the pre-pandemic 2019 holiday season.

The road to the holidays was a tumultuous one. The Omicron variant hit just as many consumers were getting back out into the stores, and after a strong October of in-person shopping, things shifted again. “After omicron hit, some consumers stayed home and shifted their spending to e-commerce–but sales stayed strong,” said Steve Sadove, senior adviser to Mastercard and former CEO of Saks Inc.

Although early shopping indicated there would be more in-person shopping, when all was said and done, online shopping accounted for 20.9% of total sales over the holidays. That's an increase from 20.6% in 2020 and 14.6% in 2019.

Worry about the supply chain may have also helped boost spending numbers, as shoppers secured holiday must-haves even earlier than usual. Shoppers originally rushed to stores amid supply chain concerns as COVID-19 cases surged, sending sales at physical stores up 8.1% compared with 2020, according to Reuters. That died down when Omicron soared closer to the holidays.

Changing Shopping Trends

After last year, when home goods, home improvement, and loungewear took center stage for shoppers, the type of items purchased this year were different. According to CNN, "Consumers splurged throughout the season, with apparel and department stores experiencing strong growth as shoppers sought to put their best dressed foot forward,"  Sadove said. Unfortunately, the swell of Omicron numbers cancelled many holiday plans, as it came right at the last minute before the holidays.

Although Omicron might have stopped some physical gatherings, it did not stop shoppers. CNN reported that clothing sales rose 47%, jewelry 32%, and electronics 16%. Online sales surged an unbelievable 61% over 2019, and department stores showed a 21% increase over 2020, proving that more people were indeed out shopping physically this year, but online shopping is not going away anytime soon.

And shoppers reacted differently to different retailers. Oliver Chen, senior retail analyst at CNBC said “some retailers, including Walmart, Costco and Target, are better positioned than others because they cut across merchandise categories and have online business options, such as curbside pickup and home delivery, as people look for convenient and safe ways to shop.”

The Future of Retail

There are no crystal balls when it comes to the pandemic, and experts are not entirely sure what the economic future holds either, aside from the virus. When considering the economy and the Covid-19 variants, the equation is perilous, and experts worry that looming inflation and the continued impact of the Omicron variant will influence customer shopping habits in the coming months. And the supply chain issues are still causing problems, with some forecasters worried that specialized holiday items might miss the window altogether and must be sold for a deep discount.

Retail consultant Jan Kniffen said “he has been impressed by consumers’ willingness to keep spending and retailers’ ability to put up big numbers, despite a complex backdrop of congested ports, labor shortages, wage increases and more.”

Because of the lingering effects of Covid, people will likely spend their money on goods rather than services such as trips, movie nights, or salon visits. When people are pushed back into isolation because of a Covid-19 exposure, they can still enjoy online shopping even if they are not willing to go out to enjoy restaurants or movies or other experiences.

With the continued threat of a pandemic virus on the loose, supply chain problems, labor shortages, and inflation, it is a wonder that shoppers prevailed during this holiday season. But with a 10.7% increase over the last pre-pandemic year, American consumers proved that they are ready to get back to normal, whatever that might mean, and they were seeking a more typical holiday experience this year.