Covid-19 and retail’s digital acceleration -
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Covid-19 and retail’s digital acceleration

Ai Editorial

Ai Editorial: Travel merchants must look at ways to capitalize on the sizable e-commerce penetration that has resulted in the last 12 months or so, as it is now clear that Covid-19 has immensely contributed to retail’s digital acceleration.

6th April, 2021

Cross-border trips expectedly took a nosedive, but travel companies should eye opportunities to target a slice of a shopper’s wallet, as certain categories witnessed a tremendous spike in transaction activity.

Overall, the pandemic not only influenced where one shops, it had a big impact on how to pay for the same.

According to Mastercard’s latest Recovery Insights report, an additional $900 billion was spent in retail online last year.

Other key highlights:

  • E-commerce made up roughly $1 out of every $5 spent on retail in 2020, up from about $1 out of every $7 spent in 2019.
  • Shoppers increasingly opted for touch-free interactions using devices and contactless cards, which also create more fluidity in a consumer’s ability to buy online as they become more accustomed to digital payments. The report highlighted that evaluating retail and restaurant locations in the US, the shift to electronic payments has accelerated by about one year, according to the analysis of payment forms at brick-and-mortar retail stores and restaurants.
  • The domestic shift to digital isn’t uniform across the globe. Economies that were digital leaders before the crisis (such as the UK and US)saw larger gains in the domestic shift to digital—and those gains look to be more permanent. 20%-30% of retail’s global digital shift in 2020 will be permanent (expected to be about 20%-30% of a country’s peak). However, as indicated in the report when given the opportunity, many shoppers are expected to return to stores and in-person recreational activities, where the transaction, not the experience, is often digital.
  • Expect 70-80% of the grocery e-commerce surge to stick around for good.
  • E-commerce made up about 18% of total restaurant sales before the crisis. Expect about 30%-40% of restaurants’ e-commerce peak will stick.

For some companies-those that were digitally ready, this has been a tremendous opportunity.

  • Are some airlines better placed to capitalize on the trend?
  • What are they looking at adding in order to garner ancillary revenue?


By Ritesh Gupta, Ai Team

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