In a continuation of COVID-19-driven surges in ecommerce, U.S. nonstore sales grew at a near-record level for the month of August, new U.S. Department of Commerce data shows. But the noteworthy year-over-year increase still marked another slowdown from spending earlier in the pandemic as digital revenue boosts that have helped offset declining store sales lose a little momentum.
In August, consumer spending through nonstore channels decelerated compared with July but still jumped 21.2% year over year, according to a Digital Commerce 360 analysis of the Commerce Department’s advance monthly figures released Wednesday. Numbers exclude estimated fuel sales.
Last month’s performance is the second-highest year-over-year uptick for the month of August, behind only a 23.2% increase in August 1994 and up considerably from 15.1% in August 2019. Yet, the 21.2% registered in August 2020 falls short of the 25.5% year-over-year bump in July 2020 and is the lowest growth rate of any full month in the COVID-19 period.
This year, August growth in the nonstore channel also accounted for nearly three-quarters–72.7%–of all retail gains.
The Commerce Department’s nonstore sales–which are mainly online but include other sales such as orders through call centers, catalogs, door-to-door visits and vending machines–don’t align perfectly with spending captured in the pure ecommerce figures that the agency releases quarterly. But the data is an early indicator of trends in the online sector. Digital Commerce 360 analyzes non-seasonally adjusted Commerce Department numbers.
Online sales slow but still see significant growth
Research firms and vendors that track ecommerce data also have noticed a tapering off of online sales throughout the summer, although year-over-year growth remained significant in August.
Adobe Analytics, the data insights arm of software company Adobe Inc., reported substantially higher online spending last month, with U.S. ecommerce sales getting a 42% year-over-year boost. But August’s performance marked another dropoff from even more dramatic spikes earlier in the pandemic. July’s 55% year-over-year growth in online sales was already a marked deceleration from the 76% jump in June, according to Adobe data.
The firm attributes part of August’s dropoff in digital revenue to more stores reopening and notes that consumer survey respondents reported feeling more comfortable visiting physical shops last month than in July.
“While online shopping continues to dominate, we’re now seeing a slowdown in growth as more people return to shopping in brick-and-mortar stores and consumers curb their online spending across certain categories like apparel,” says Vivek Pandya, Adobe’s senior digital insights manager.
Adobe’s data is based on transactions from more than one trillion anonymous online visits to retail sites, including 80 of the top 100 retailers in the Digital Commerce 360 Top 1000, and covers more than 100 million SKUs. Data is based on a variety of product categories including apparel, electronics, home, grocery, appliance, personal care, office supplies, books, jewelry, furniture and toys, among others.
In August, shipment volume for retail clients of Convey, a last-mile technology vendor, was up 13% year over year but down 3% from July levels, according to the company’s fulfillment data. The number of packages shipped has declined each month since April’s high of 19.0 million. The 13.3 million retail shipments sent in August represents a nearly 30% drop from the peak in April.
Convey’s data is based on tens of millions of packages shipped from more than 500,000 U.S. locations across the company’s client base but excludes shipments from Amazon.com Inc., No. 1 in the Top 1000. The vendor has 130 retail clients across many merchandise categories, including retailers The Home Depot Inc. (No. 5), Neiman Marcus (No. 40) and Eddie Bauer LLC (No. 137).
The online order volume across retail clients for CommerceHub, an ecommerce software provider, also continued to surge last month with shifts in demand for homeschooling, home office and recreational products, the company says. COVID-19 pandemic-related behaviors seem to have caused a permanent change to shopping patterns, according to Erik Morton, senior vice president of product and strategy.
Total sales continue to recover but temper
Total retail sales through all channels for Digital Commerce 360-defined segments rebounded for the fourth-straight month after a severe drop in April, when most stores were closed, but continued to level off from higher gains earlier in the summer.
In August, total retail spending rose 5.7% year over year, excluding estimated fuel sales. That was the highest year-over-year growth for the month since total retail sales increased 6.8% in August 2011 but a sizable slowdown from July 2020’s revised 9.8%.
Digital Commerce 360’s calculation of retail sales–which excludes sales in sectors that don’t typically sell online such as restaurants, bars, automobile dealers, gas stations and fuel dealers–differs from overall Commerce Department data as many omitted categories have been among those hardest hit during the pandemic.
“August was topsy-turvy as COVID-19 brought a lot of shifts and uncertainty regarding back-to-school spending and other issues, but consumer spending remains intact even if sales grew less than July,” says Jack Kleinhenz, chief economist at the National Retail Federation. “Retail spending habits have remained largely consistent and stable these past few months since stores began to reopen.”
Some shoppers likely reduced their spending since the $600 supplemental unemployment benefits expired, but consumers have built up more savings from that as well as other government aid that has helped to support shopping, Kleinhenz says. However, it’s difficult to pinpoint how much economic activity is due to government support versus demand fueled by recent job gains, he adds.
“August numbers might have been higher if not for small businesses struggling with reopening and the return to full operations,” Kleinhenz says.