How Covid accelerated the trend towards online shopping in two pictures. 
Online Shopping Chart Notes
- I created the above chart by calculating the percentage of things bought online that normally can be purchased online.
- The calculation excludes the obvious, like gasoline and restaurant dining. It also excludes auto sales and grocery shopping.
- While one can buy groceries online, nearly everyone buys the vast majority of their groceries in physical stores. Things like Doordash are trivial vs eating out and will remain that way perpetually.
The trends look linear in shorter timeframes but the propensity to buy online is really an exponential trend as the following chart shows.
Nonstore Retail Sales as Percent of Advance Retail Sales Long Term
The trend towards online shopping puts department shore shopping on a death bed.
Department Store Sales as Percent of Advance Retail Sales
Department Store Sales 1992 vs Today
- In 1992, department store sales were 13.63 percent of advance retail sales, exclusions noted.
- Today, department store sales are 2.31 percent of advance retail sales, exclusions noted.
Nonstore Sales 1992 vs Today
- In 1992, nonstore sales were 8.95 percent of advance retail sales, exclusions noted.
- Today, nonstore sales are 34.36 percent of advance retail sales, exclusions noted.
Judging from the charts, the Covid pandemic boosted online shopping by a sustained two percentage points.
Retail Sales Were Very Weak in May Counting Negative Revisions
Earlier today I noted Retail Sales Were Very Weak in May Counting Negative Revisions
If someone tell you the consumer is strong, please have them read this post. The strong consumer is all a mirage of inflation. (Four Charts)
From its early start, Amazon went from selling books online to selling nearly everything.
It is the big beneficiary of the accelerated trend towards online shopping.
Department stores? Who need em?
I’m an outlier. When stores weren’t open during early Covid, i just didn’t buy anything that wasn’t Grocery store related. No online shopping. I like to hold an item in my hand, then buy it if i like it. Two weeks ago i visited the indoor Burbank mall for the first time since the Pandemic. Went to Burlington to buy a belt, then wandered around the mall. Burlington looked like it had morphed into discount store. Bed Bath & Beyond was now a game arcade. Sears was closed and empty. The AMC theater has a ticket kiosk now. Haven’t even been to a movie since the pandemic, anyway.
One thing that got me more into Online shopping were the Reviews by customers.
Most reviews are useless but about 10% usually focus on a products quality.
I have avoided poor products and made better choices by reading Customer reviews.
In a Department store you might have a biased salesperson or usually nowadays you have to serve yourself anyway. Having it delivered adds even more icing on the cake towards online buying as often I go to a store and find things are out of stock.
”
From its early start, Amazon went from selling books online to selling nearly everything.
It is the big beneficiary of the accelerated trend towards online shopping.
Department stores? Who need em?
”
And the next step in the evolution, is direct shipping from producers in Asia (or elsewhere..). First bypassing Amazon warehouses, storefronts and markups altogether. Then moving on to also bypassing the legacy brand names whose increasingly unsustainable margins; largely based on little more than recognizability to guys who remember the 50s; are by now little more than hangovers from a bygone era of severe shortage of ability to process more granular and detailed end user datastreams in near real time.
It’s already happening, at scale, in fast changing, high volume sectors of retail like fashion: Any designer/manufacturer who does not receive ALL available browsing, social-media-interaction etc. data, from each and every potential end user of its products within 3 seconds of each piece of data first being generated by end user interaction; is so hopelessly behind he may as well switch career to subsistence farming.
This development will gradually also become the norm in other product categories. Leaving large intermediary; invariably information granularity destroying; buffers in the form of warehouses, “distribution agreements” etc., hopelessly outdated.
Online = in stock, not an empty slot
Online = larger inventory (even if 82.34% is Chinese junk)
Online = no driving. I hate driving.
In-store = I can touch and feel before purchase. Which is irrelevant as I buy the same stuff over and over again.
In-store = driving. I hate driving.
I have not been in a department store in over 20 years.
Small stores are OK with me. Especially ones I can walk to. There is a reason to live in a former street-car suburb that is part of a vibrant city.
And while people like me would like to support local shops it is harder to do so as they often do not have what you want in stock so they need to order for you. Could do that your self. Probavly good news as there is little I really need beyond groceries.
Department stores have been dead for 20 years there will always be a few customers and never enough to pay that massive rent on the space. I find prices are really close online or in stores so I go to stores. Online shopping long term is unsustainable it’s as simple as understanding the delivery system. It’s a eco disaster if everyone did it I see it as lazy ass shoppers way to buy crap.
Mojo Nixon once sang about burning down shopping malls. Turns out, it wouldn’t have been worth the effort.
Covid was definitely responsible for my family’s on-line shopping amongst many other things, like no travel. I must honestly admit, that I never used Amazon myself until Covid. We actually enjoyed shopping as we often made it into an experience.
We would plan a lunch somewhere in advance, near the locations we old be at. Depending on the time of year, we would plan an activity as well. We would often do bulk shopping if you will, so as to get things out of the way, why we were out (fill gas, stop at bank, pick up dry cleaners) etc.
We actually miss much of that now, as going out to eat, is now a thing of the past. We learned how to cook and bake in those 2 years! Now it’s a treat to an occasion only! We miss getting things done all the same day, and find ourselves scrambling more often as a result.
No interest in much of the hoopla, like solar panels (too costly to repair and dispose, for what you get back (which has already decreased, as they like to hook you in), EV’s for the same reason, and I will definitely drive a GV as long as gasoline is available (I suspect very long after my lifetime has passed). No thanks on the Windmills either, as again a environmental disaster (like EV Batteries, and Solar Panels), and far too costly to maintain and dispose off of, for the actual small value they provide, currently anyway…
We will continue to enjoy our time taking walks everywhere we can, and learning how to be self sufficient as much as possible. No rush for the hype and drama coming from this Administration and the MSM who is bought and paid for, and not looking out for Me that’s for damn sure!!!
Good Luck out there!
You fell for it then. There never was a pandemic. Covid was just a cold virus designed to make you alter your shopping habits. And the vaccines were just a way to secretly microchip you in order to track you, because Bill Gates wants to know every time you take a piss. Everyone with half a brain knows this. Gates is one of vampire generals in Soros vampire army.
I don’t have a clue what you are referring to?
I didn’t fall for any of it actually. I didn’t believe in the Pandemic from the start, and any of the BS that went along with it like mask & Vaccines. I do like to save money however, and Amazon has saved me a boatload of money, time, and much more. Learning how to cook has expanded my at home menu choices, and at a fraction of the cost. I took this opportunity to save money, learn things I didn’t know, and to get out and walk and enjoy nature much more. A massive WIN for Me and my Family.
I have more money now, I am more self sufficient, gained knowledge, and am much happier in my life. I thank Covid for that anyway…
What did you learn?
I learned that people like you are f*cking stupid because they believe in conspiracy theories.
I see now, why so many down vote you. You’re unhinged in your often delusional opinions of others, whom you don’t know anything about.
I have enjoyed some of your investment advice, and made some money there too, so thank you! I would stick to that though, and leave the conspiracy theory’s to others about others, as I think you’re smarter enough to know better I think?
I don’t appreciate your crude, and unnecessary comment above however, but I will let that pass, as you learn more to control your behavioral issues towards those that don’t agree with you…
Have a splendid day!
First: You’re welcome. I sincerely hope you make a lot of money from my investment recommendations. Markets were closed today, so no investment advice today.
Second: I have had a little bit of time to read the comments today and try to generate some traffic here for Mish. I appreciate his blog and occasionally try to help him out. Plus, I enjoy taunting the conspiracy kooks when I have the time. They are hilariously stupid!
I consider it a success if I can get a lot of downvotes. The more, the better. A couple of days ago I recommended a list of oil stocks, and that was downvoted as well. Success!
Interesting. You claim someone “fell” for something, which thing is often described as a conspiracy theory, then chide for believing in a conspiracy theory. It is unlikely that those behind the COVID experience knew the entire menu of results. The commercial real estate market, online shopping, and vaccine makers all had different results. Were they all intended? Seems unlikely to me.
Simply, I think the vaccine makers saw an opportunity to make a lot of liability-free money when some government agency decided to take advantage of an opportunity (COVID) release. Since we still don’t know for sure who killed JFK I have zero expectation the full COVID story will be known in the next 100 years. Unless AI releases the story.
I don’t think the lockdowns were a coincidence. Gov Prritzker locked IL down for over a year (no entertainment- restaurants, movie theaters, museums, etc). Pritzkers family owned a medical facility that made money off the covid testing. Meanwhile his family wasn’t in lockdown. His wife and daughter went to Florida and the family would go to their farm in WI.
What? Everyone with half a brain knows that George Soros had JFK killed. It’s on the “conspiracies are us” website.
Well what’s going on here? Is that the real PD?
Hi John. This is the real “PapaDave”. I have only seen the fake “Papa Dave” with a space, once. If you see the space in the name, it’s the fake.
Markets are closed today and I had some time to generate some comments. Occasionally, I have some fun taunting the conspiracy kooks.
I also posted a few serious replies to some of the sensible commenters.
I see WTI closed flat on day at $81.50.
Looking forward to when trading resumes.
Spam
It is interesting that theories turn out to be facts, as Musk said about the Twitter Files. Antiviral drugs would have made short work of the pandemic. But the official agenda was an EUA mRNA mass vaccination program, which allowed for breaking the rules on vaccine development and testing. The agenda wasn’t about public health, as DOD knew in April 2020, that Ivermectin worked. Using Remdesivir in hospitals wasn’t about public health. V-Safe recorded a 7.7% rate of serious adverse events from the shots. The CDC hid the data for 2 years. The Covid shots were a public health threat.
Hi Ron. No point in me discussing your conspiracies. I could parade 100,000 doctors and scientists in front of you, but you would still believe the handful of people who preach what you want to hear. You are the most consistent believer in conspiracies here. Congrats! Of all the dumb f*cks here, you’re the dumbest.
The lengths the government will go to try to control people. During Covid I shopped in person. We were in lockdown in IL so we left the state on weekends to have fun. I refused to wear a face diaper (aka mask) properly. I would wear it to walk in the store and then pull it down. I left Cook County to do my shopping when they refused to drop the mandate to wear a face diaper. Dupage County loved my business and tax money. I didn’t get vaxed either. I won’t allow ANYONE to control me. We moved out of IL this year.
Good for you both!!
More brain fog than Biden’s
The vaxes were for depopulation. They track you with everything online.
Oh. That’s a good one. Actually, I’m pretty sure that Soros ordered that the US vaccines be designed to make you vote Democrat. And they need you alive to do that.
Now, what were the different Chinese vaccines designed to do? And did Soros have a hand in that as well?
Where are you getting all of that twaddle? Stu didn’t mention or suggest anything about a conspiracy in his comment. He simply stated how COVID changed his shopping habits. I’m sure alot of people changed thier shopping habits due to COVID just like Stu described above.
While I often disagree with you, your comments are generally well thought out. This one is unhinged and uncalled for. Do better.
Today is not a “do better” day. It’s a piss off the cult morons day. Markets were closed and I had a little bit of spare time. Occasionally, I enjoy taunting the cult morons here. Most days, I’m too busy making money to bother with them. Plus, it generates a few more comments for Mish. Some days I’m too busy to even drop by.
Sahm indicator : Sept 0.20, Oct 0.33 and Nov 2023 0.30. The 3 months average = 0.28. In order to trigger a recession the 3 months average must rise > 0.78. Mar 0.30, Apr 0.37 and May 2024 0.37. The 3 months average = 0.35 . That’s less than half. The Fed is apolitical. The Fed isn’t going to cut rates before the Nov election to help Joe Biden, especially after SPY and QQQ reached a new all time high and the trend shows no signs of slowing down.
The large banks issued most CRE debt, but it’s a tiny portion of their total assets.
Soros pushed for state law changes to encourage theft from retail stores.
That just creates more demand to buy from Amazon as consumers feel unsafe shopping in these stores, and the costs are much higher due to shrinkage (theft, etc).
I wonder if that James Bond – style evil genius (Soros) planned this all out and invested early in Amazon to take advantage of this.
Just like I wonder if Soros pushes DEI such as with Disney, and then shorts Disney stock to make money off this as well.
Yes. Soros is actually a thousand year old vampire who has been controlling the world for hundreds of years now. His goal is to cause so much chaos, that it will be easy for his vampire army to take over in 2025. As it has been written in the secret vampire diaries (the bible). You just have to know how to decode it.
Soros didn’t write the bible, we did, thousands years ago. Soros paid Palestinians to cause chaos and kill Israeli troops. Since u hate Israel ==> u should love Soros.
Muslim bros and the Islamic jihad want to cause chaos and poverty in the west to spread Islam and takeover Europe and the US.
Yes he did. It said so on the “conspiracies are us” website that you follow so religiously.
Why would I hate anyone or any country? Hate is a waste of time.
I’ll leave it for you to embrace hate.
Tell me you’re on the short list of “almost banned from comments” without telling me you’re on the short list of “almost banned from comments”.
Nope. As a few commenters have pointed out previously, I’m obviously on the payroll here. My job is to generate controversy and more comments.
How am I doing?
America’s number one new profession is being a Porch Pirate. Was that planed too?
The Fed is effectively saying they waited too long to hike rates by leaving them higher now to kill inflation. Once again the central bank keeps looking at lagging data for both hikes and cuts.
Powell said on 60 Minutes that he would lower the Fed Funds Rate if inflation remains below 3%.
I believe the Federal Reserve relies mostly on PCE, which has remained below 3% for at least 6 months.
I suspect the Federal Reserve would lower the Rate only from 5.5% to 5.0% this year, and keep that Rate at least 1.5% above annual inflation, as a safety margin.
mmm, maybe – but Taylor Rule optimal rate ~ 6+%
Another recession indicator.
https://www.cnbc.com/2024/06/18/economist-sahm-who-devised-recession-rule-says-the-fed-is-playing-with-fire-.html
Seems to me the Fed is willing to live with slightly higher unemployment to kill inflation first.
I don’t see how slightly higher unemployment, will add to the reduction of inflation? I see how it will have the opposite effect however. More people will fall behind from the bottom up, and not the other way around.
Higher Unemployment will help for sure, as way less people have money to spend then. Low or slightly higher, just keeps the lower end down, doesn’t decrease what they didn’t add, and allows the higher, above slightly lower earners, to keep on spending, as they now have more choices and more money, all which adds to inflation.
Typically mass unemployment is what is needed to squelch demand, and/or much higher interest rates, to increase cost out of reach for the masses. To try to beat around the bush, and have it occur and slow inflation, is a fools errand as we are all witnessing right now. Taking taxpayers money to give away to others won’t work, and never has or will work for the obvious reasons.
Looks like the many severe miscalculations, by our current Administration , has them in quite the pickle right before the election, and with zero easy ways out of it at this point IMO, before the election…
I see bigger signs of an even bigger commercial real estate bust.
This is terrible. I predict people along the gulf coast will move inland permanently to higher ground in Tennessee and Georgia. Florida is never going to be the same after this year. Insurers will flee the state even more.
https://www.msn.com/en-us/weather/topstories/ar-BB1orXZt
That’s okay. Desantis has already fixed it. He is removing the term “climate change” from all Florida government papers because “there is no such thing”. It’s all a hoax. Problem solved.
There is a media blitz against FL bc FL is republican.
And George Soros, the head vampire, controls the media; right?
The problem is that you’re watching MSN.
Yes. You need to be reading “conspiracies are us” news like so many of the dumb f*cks here.
This is funny. As my dad always says, you don’t want all the growth you can get.
https://dnyuz.com/2024/06/18/i-live-in-hell-anti-growth-fervour-grips-u-s-south-after-pandemic-boom/
Five years after Yorktown, in 1786/1787, poor MA ex Revolutionary War veterans – the Shay Rebels – refuse to pay high property and individual taxes. They rejected the
Constitution. They shut Northampton, great Barrington, Worcester, Taunton and Springfield courthouses. They attacked judges who confiscated their properties.
They were against law and order. MA gov declared an “Emergency Rule”. It strengthened the call for a strong national gov.
My favorite rebellion is the Whiskey Rebellion.
It was crushed by the owner of one of the largest US distilleries using the American army.
An exponential trend of a relative size in per cent will not survive 100%…
The Death of the EV…. https://www.reuters.com/business/autos-transportation/ev-startup-fisker-files-bankruptcy-2024-06-18/
Tesla will also end up at ZERO
Yep. Wait until gas goes back to $2.00 a gallon when the economy tanks. I predict the next recession will be the ugliest in recent history.
As sales of EVs and PHEVs combined continue to grow, they will slowly reduce the overall number of ICE only vehicles. This is already slightly reducing demand for gasoline. But the supply of gasoline keeps increasing because it is the main product of refining oil. And we need to keep refining more oil for all the other products.
The surplus of gasoline will grow over time and the price of gasoline will drop. Though taxes on gas will likely increase. We do not need a recession for this to happen. The US will become an exporter of gasoline, assuming that we can find a market to sell it to.
Eventually oil companies will pay us to take gasoline away from their facilities. Those who kept ICE vehicles will benefit greatly. Be sure to hold your breath Papa.
ICE owners will benefit unless taxes go up on gasoline to offset the drop in prices due to the supply/demand imbalance.
Yes. Prices can go negative for short periods of time. Oil dropped to negative $20/barrel for a couple of days. And there are often times when electricity prices go negative due to overproduction from renewables.
Brick and mortar shopping can come back. Set a whites only day at the mall.
Prices at the pumps deflated. Taxes at the pumps inflated relative to the total charges, especially in CA. Drivers buy more gas (in liters) for less. They fill the tank less frequently. They buy less junk food and drinks. 7-Eleven buying Speedways was a disaster. Gas stations cannot escape the higher labor cost. In some states a gas station attendant fill the tank. Higher labor cost, higher taxes and o/h on less volume. Gas stations cannibalized each other.
Walmart (Sam’s Club), Costco, Giant Eagle, BJ… have gas stations.
I predict deflation and government deficits higher than anyone can imagine. A rate cut or emergency measure can’t create a sustainable economy. Only lower prices on everything can.
Worse yet, few know their neighbors name.
Department stores were hit with a one-two punch. Covid was the first, but rising crime/violence at malls is the second. If you don’t feel safe going to the mall, you won’t. It would be interesting to plot crime / violence at malls on the same chart.
CPI adjusted dollars do not fully account for real inflation. You have to count widgets to get real sales. Nominal sales may be rising but real sales are contracting. This depression won’t end until President Trump reshores manufacturing. When that happens construction will boom. Good paying manufacturing jobs will be on offer and gig workers will snap them up. The Chinese can pound sand.
Reshoring is a nice thought but America has become accustomed to buying things cheaply. China offers that price tag, American manufacturers charge higher prices which will move more jobs toward automation. Good paying US jobs will flourish in the trades (electrician, plumbing, carpentry, etc).
Good paying jobs will also flourish in investment banking, politics and funding hedges.
There are very few manufacturing jobs left to reshore. They have mostly been automated worldwide. Like agriculture.
Agriculture employment has dropped from 90% in 1800 to 2% today because of automation. Manufacturing employment has dropped from 30% in 1950 to leas than 9% today because of automation. And it will keep dropping.
There is nothing that Trump or Biden can do to stop this. The same thing is happening in China.
I unwittingly bought fake Nike shoes online. Now I have ingrown toenails.
Nonstores sale : 34.36 is a lower high. Online sales are done by c/c. C/C debt is down. It peaked at $1,061T. Dept store sales as % : a higher low.
I buy food from Walmart online. People buy cars from Carvana. Wholesalers buy from Manheim online. Car dealers buy from each other online.
Dept stores 30Y downtrend since the 1990’s is broken.
I buy notes and bonds from Treasury Direct.
All just part of the plan to eventually force a CBDC down our throats.
Yes. This was all designed by those who wrote our Constitution. Those bastards.
There is a difference between Amazon type online sales and online grocery or restaurant purchases. In the former, goods are delivered from a warehouse while the latter are delivered from a retail establishment.
“Covid”
“Hot Dogs”
Interesting.
I’m wondering about the 64% on neither chart (online 34%, dpt store all the way down to 2%!) but that leaves 64% unallocated.
Considering that things like gasoline, food, groceries, and auto related are already definitionally excluded from these charts, what other outlet is there to cover the missing the 64%?
Mish?
Agree that restaurant visits will not change much, but online grocery shopping is helping to keep many seniors in their homes. I know many seniors who have all the “heavy” stuff delivered, and then go to a store for some fresh fruit and small items. As the boomers age, I see more and more groceries being delivered. Also someone mentioned the hybrid model of ordering online then just picking up. My local store likely has 50% of groceries sold this way.
When I’m doing a remodel … if I need lumber, I go to (sometimes ordering online) Lowes or Home Depot and grab it. If I know I’ve got a good bit of plumbing or electric to do … I tend to order lots of the connectors and parts in bulk online … it avoids lots of trips to the store, and I pay about half what it would cost grabbing at Lowes or Home Depot (with some exceptions). I still hit the locals (Lowes, HD, Ace) when I need something now … or when it’s something I’m not as knowledgeable about and I’m not sure what to order online … but I split the purchasing to where it serves me best. Seems like Lowes/HD/Ace are not exactly dying on the vine.
If you need weights for exercising, is it cheating if you have them delivered?
Chewy will deliver two 40 pound bags of cat litter plus a 20 pound bag of cat food to my home for free. I’d think they would have to be getting hammered on the shipping for that, but that’s thier problem. Prices at Chewy.com are cheaper or the same as most other places.
The free delivery is probably only the last mile to your house (we also get my cat litter/food delivered from a different online pet company).
Those bags are undoubtedly coming from a local warehouse (might even be an Amazon one) that’s supplying all the nearby stores.
Ordering things online requires delivery (personnel, trucks, fuel), and at this time, gasoline and diesel are the same pump prices as they were 10 years ago. But if peak oil finally rears its ugly head, and the number of people turning 16 (prime low-skill employee) continues to decline for the next 15 years (peaked in 2008), the model could whipsaw us right back to stores and malls.
Or the system will change to a more efficient model. Self driving vans delivering packages of all shapes and sizes with the aid of a robot. The goods getting delivered to each customers drop box ( I have one for my packages and don’t have to worry about porch pirates) on a 24/7 basis on optimised routing guided by AI
We’ve been waiting for the self-driving cars and trucks for awhile now. And Im still convinced no insurance company will insure a driverless vehicle.
Is it considered online shopping if a customer orders groceries online at Walmart and then drives to the store to have them delivered to the trunk of their car? At our local Walmart, I see a line of vehicles waiting to have their groceries brought out in wheeled, blue carts to their cars.
I did that … once. After 2+ hours waiting, I got on the app, cancelled the order, and left. Went in the next day and shopped myself.
Why not just have Walmart deliver directly to your home?
Orders over 75 are free delivery here in Florida.
Home Depot is also offering some free home delivery. If an item is not available in the local store and it has to be shipped in, they’ll drop it off at your house.
The correlation between the growth of online shopping and decline of brick and mortar stores and
The policies devised around covid and also,
the policies devised around shoplifting and vandalism
was not accidental, not at all….
Its about time someone started to point this out….
Yes. It is clearly all a conspiracy. You forgot to point out the invention of electricity, computers and the internet. Not accidental. And all part of the same conspiracy. Indeed, a multi-generational conspiracy. All designed to make you think the world isn’t flat. Fortunately,
folks like you aren’t fooled.
I stopped ordering from Amazon when I found that alternative on-line Merchants have the exact same units for sale for remarkably less.
Amazon is just a broker. And over time brokers (who neither make nor use) get killed.
online competition is indeed eroding Amazon’s retail dominance.
i now go to 5-6 different online “wholesalers”, each of whom specializes in a product/retail domain (analogous to 1-2 aisles in a store). all of them offer more depth/variety & far better prices than Amazon.
i also buy direct online from certain brands far more than I used to, which simply cuts Amazon out of the loop.
it’s no secret that AWS has been the engine driving Amazon’s profit/growth for years now.
Crowds, bums in parking lots, professional shoplifters all around. These are the circumstances that minimize my in-person shopping.
On the other hand… porch bandits.
Get a camera.
Make sure someone is home for delivery
Live in a gated community or one where there are honest people 🙂
They don’t care about cameras here in the SF Bay Area, since the police are too busy with “something” to bother with porch pirates, retail theft or traffic enforcement. On NextDoor, someone posted a photo of a porch pirate waving at the camera as they picked up their package!
With Amazon orders, I use their dedicated boxes, otherwise, I send the packages to my PO Box.
Here in Florida we take that seriously
https://www.weartv.com/news/local/governor-ron-desantis-signs-hb-549-increases-penalties-for-retail-theft-porch-piracy-looting-florida-april-9-2024
Put delivery instructions on the Amazon website. Request deliveries to be made to the back of the home.
Exactly.
The back of a home is the best place to begin a burglary.