Shopping in stores is back and thriving. that’s why

Instead, consumers have apparently grown tired of ordering everything while sitting on the couch, and have returned to shopping the old-fashioned way.

“As the pandemic subsides, you can see consumers returning to their pre-pandemic activities,” said Brian Nagle, who covers the retail sector at Oppenheimer & Co. “Consumers see the benefits of shopping in stores.”

Several factors are coming together to stimulate online sales growth, he said.

Inflation is putting pressure on consumer portfolios. This has led some buyers to abandon the purchase of discretionary items with large tickets such as electronics and furniture – products that are often bought online – or to refrain from shipping fees.

Other users were eager to go out and socialize after being locked up at home during the pandemic.

“Shopping in stores is a social activity,” Nagel said.

Signs of this change in consumer preferences are everywhere.

In May, online retail sales increased by 2.2% compared to the same month last year, according to payment data released by Mastercard on Tuesday. In-store sales grew at a much faster rate of 13.4%.

E-commerce stocks were the least performing retail sector in the S&P 500 to date in 2022, down 28% on Monday, according to S&P Global.

Amazon (AMZN) said it added too much storage capacity as it competed to meet pandemic demand and in some cases there was a surplus of staff. The company is now according to reports rental of storage space to reduce excess capacity.
Companies such as Fixing the seam (SFIX) are fighting. Online clothing styling service will cut 15% of its positions – about 330 workers – against the background of slowing growth of e-commerce. The layoffs come months after Stitch Fix cut its forecast for the full year and said its number of active customers was below expectations.
Caravan (CVNA), an online used car dealer, will cut about 2,500 employees, or 12% of its workforce. In the cities, several start-ups that have promised to replace food on the corner by delivering food and basic necessities in less than 15 minutes are lifting the abdomen.

More layoffs are expected, experts predict.

“Many of these companies have hired staff in anticipation of projected growth,” said Berna Barshai, an analyst at Empire Financial Research. “Now they will not fulfill these predictions. The obvious answer to the missed growth targets is to reduce, reduce and reduce costs. “

Turning 2020

The trend is a sharp reversal of the rush to online orders in the early stages of the pandemic. This has changed the predictions that the transition of consumers to online shopping will be constant.

Two years ago, when Covid-19 ceased to exist, online shopping increased.

With insignificant stores closed and shelter orders placed, shoppers of all ages buy groceries, home office supplies, furniture, sports equipment and other goods online in record numbers – some for the first time.

In the second quarter of 2020 e-commerce sales as a percentage of total retail sales increased by more than four percentage points to 16.4%.
Stores have too many things.  Get ready for discounts

The companies recruited staff to meet demand, expanded their distribution capabilities, and partnered with delivery services such as Instacart and DoorDash.

But after businesses reopened in the summer and fall of 2020, a turnaround began. Consumers rushed to the malls to update their wardrobes and make long-awaited purchases.

Online sales still account for more retail sales than before the pandemic. But they have been steadily declining since their peak in the spring of 2020.

Leading companies say they are seeing more shoppers returning.

“We’ve seen a noticeable change in consumer behavior when shopping between channels, with better-than-expected in-store sales and lower-than-expected digital sales.” Macy (M) CEO Jeffrey Janet said last month during a conversation with analysts.

Janet said customers come to the shops to buy formal clothes, such as dresses to wear to parties and social events. At the same time, they gave up buying casual clothes online.

Niraj Shah, CEO of an online furniture retailer Wayfair (У)told analysts last month that the “pendulum” has returned to personal shopping after a jump in online shopping in 2020.

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