Click and mortar: A comeback for physical stores

Americans shopped online like crazy during the pandemic, right? Motivated by fear or convenience, more of us grew comfortable clicking “buy” from our sofas — including to buy sofas — and there’s no turning back. That is true. And also, well … no? Or maybe? Fresh data shows something that surprised me: Physical stores beat online shopping in 2021. No joke. Americans spent 18 percent more on food, cars, furniture, electronics and other retail products last year compared with 2020, the Commerce Department disclosed on Friday. Online retail sales increased by 14 percent. In other words, e-commerce lost ground last year to brick-and-mortar stores.

Admittedly, 2021 was a strange year for shopping. More of us had the urge to browse in person than we did in the scary first months of Covid in the U.S. Climbing prices and shortages changed what people bought and where they shopped. And one year doesn’t alter the long-term trend that online shopping is grabbing more of Americans’ wallets. But the comeback for physical stores also points to how difficult it can be to predict the speed at which technologies alter our behaviours and the effects if and when they do. The future does not necessarily arrive in a straight line. One of the big debates for our economies and lives is how much the coronavirus and the digital adaptations to it might permanently alter all aspects of how we spend our time, including the future of office work, movie-going and exercise habits.

The honest answer is that we don’t really know. Much has changed, but a lot has not. Brian Wieser is one of my favourite numbers nerds, and he alerted me to the fact that physical stores won in 2021. Wieser, the global president of business intelligence for the advertising firm GroupM, said that he’d taken to zooming out in two-year blocks of time to assess the disruptive effects of the pandemic on businesses and us.

Wieser described what he’d seen as a “new plateau” — the pandemic accelerated digital trends that were already happening and kicked our usage to a higher level. A lot of people who research human behaviour have likewise talked about the ways that we’ve reached familiarity with e-commerce, remote work, telemedicine and online socialising that might not have happened until 2025 or later absent a pandemic. Wieser’s data crunching shows that we increased our shopping online more in 2020 and 2021 than we had in any two-year period since 2006.  Amazon and Walmart have also encouraged their investors to look at two-year chunks of time. At Amazon, this may have been motivated in part by lacklustre sales. During the last six months of 2021, Amazon showed the slowest rate of revenue growth in 20 years. Juozas Kaziukenas, the founder of the e-commerce research firm Marketplace Pulse, posed a question to me a couple of months ago that I haven’t been able to forget: Did the coronavirus really compel us to shop online more — or just shop more, period?

It’s a confusing time to assess what technology has changed in us. Wieser’s visual metaphor of a plateau is useful. Maybe we’ve reached a new level of familiarity with and use of technologies. That doesn’t mean we can predict where we go from this new perch. We are still terrible at predicting the future of technology and how people and societies respond to it. Sometimes a new app that we can’t stop talking about turns out to be Instagram, and sometimes it’s Ello. And human behaviour can change slowly, until the point when it swamps us. We might feel as though online shopping were ubiquitous, but even now more than 85 cents of each retail dollar in the U.S. is spent in physical stores. So which is it? Is online shopping the future of how we buy and change everything or is it a relatively small change that is having mammoth ripple effects. Yes.