US retail sales have recorded their strongest monthly surge ever, jumping 17.7 per cent in May, according to statistics.
The news comes as retailers progressively reopen across the country to a vastly changed operating environment where online is the norm, cashless is gaining popularity and sanitization remains a major focus.
Here’s the rundown on what’s happening in retail right now…
After plummeting 14.7 per cent in April to $412.6 billion, retail sales rebounded strongly in May by 17.7 per cent. The record surge saw sales hit $485.5 million but according to the US Census Bureau are still 6.1 per cent on May 2019.
Discussing the improved figures on CNBC, National Retail Federation CEO Matthew Shay noted it was “incredibly encouraging news”.
“I think it’s consistent with what we heard CEOs, retail executives and other retail leaders saying about the end of April that they saw momentum that just continued, and so there was significant pent up demand,” he said.
“All the work in the Cares Act I think provided the jolt that we needed, and retailers have been adapting to serve their customers in new and different ways.”
Ms Shay went on to note major retailers had enjoyed particularly strong performance, but the big question revolved around small, independent, and mid-sized players.
“Can we get the rest of the economy moving quickly enough that we can bring the small businesses along? Because they’re the ones who don’t have the same resource capabilities, and the same supplier relationships. They get hit harder and they get hit first, so we need to bring them back quickly.”
Online retail was one area recording record growth, with e-commerce enjoying 77.7 per cent year-on-year growth in May, according to Adobe’s 2020 Digital Economy Index.
The report found US consumers had shifted a significant part of their shopping online since the beginning of the pandemic, resulting in an additional $52 billion online spend.
- The $52 billion equated to more than a third of the 2019 holiday season in additional spend.
- E-commerce shopping levels are tracking at above holiday (Nov-Dec) levels.
- May generated $82.5 billion in online spend, up 77.8% YoY
Although behind global adoption rates, cashless purchasing in the US was steadily increasing long before Covid-19 made its presence felt. Since the pandemic began it has taken on a new momentum as consumers turn to the perceived safety of ‘tap to pay’.
Visa has reported tap to pay transactions in everyday segments like grocery and pharmacy have grown more than 100 per cent year over year. But between March 2019 and March 2020 the payment method skyrocketed 150 per cent.
“31 million Americans tapped a Visa contactless card or digital wallet in March 2020, up from 25 million in November, with overall contactless usage in the US growing 150 per cent since March 2019,” they said.
“The US now has the most contactless cards of any market globally at 175 million, with nine of the top 10 US issuers actively rolling out new contactless cards to customers.”
So, what’s the takeaway?
It’s clear both retail and the consumer they cater to are changing. It’s equally clear many retailers are prepared to meet the challenges ahead with fresh strategies that embrace an altered landscape.
Online retail and cashless uptake appear here to stay, but when retail offers this convenience, US consumers still seem more than willing to spend.
The key for major and middle-tier retailers alike will be protecting their bottom line to ensure they can continue to adapt and seize every income opportunity over the months ahead.
You can read more about loss prevention strategies to improve your bottom line here.