Breakingviews – E-commerce boost is about more than Amazon

Two freshly delivered Amazon boxes are seen on a counter in Golden, Colorado August 27, 2014. REUTERS/Rick Wilking

NEW YORK (Reuters Breakingviews) – Amazon.com still dominates the fast-growing e-commerce pie, but it’s getting some company. Lockdowns have trained people to shop online including in formerly laggard categories like groceries. That has helped Jeff Bezos but even more so digital sales at Walmart and other retailers. The future may be a lot to do with balancing clicks and bricks.

Overall retail sales have suffered mightily as shops shuttered their doors to keep coronavirus at bay. Evercore ISI estimates sector sales, excluding e-commerce, autos and gas, will shrink 6% this year after expanding nearly 2% in 2019. A recession, which the United States officially entered in February, is an additional headwind for consumer spending.

But the pandemic has acted as an accelerant for e-commerce. Shoppers had little choice but to order online to get milk, eggs and the like delivered to their doorsteps. In April alone internet sales doubled or more year-over-year at Walmart, Target, Home Depot and Etsy, reckons Morgan Stanley, as consumers stocked up on food, cleaning products and stuff for home improvement.

The convenience has staying power even as people emerge from sheltering in place. Morgan Stanley revised its forecast for online sales growth this year to 25%, nearly doubling its previous estimate. That’s an additional $71 billion directed at electronic purchases. And there’s plenty of headroom. E-commerce is expected to account for about a quarter of the estimated $3 trillion in total retail sales this year excluding food services, among other categories.

Amazon is forecast to grab 38% of e-commerce sales this year according to eMarketer. But a rising tide will lift other boats as well. The research outfit expects Walmart to beat internet-only marketplace eBay to the No. 2 spot this year.

Beleaguered traditional retailers have a potential advantage on the e-commerce front, too. Even before the pandemic, more consumers said they wanted both online and in-person options, while fewer wanted to be limited to either walk-in stores or online-only shopping, according to an Evercore ISI survey. Curbside pickup, a staple of post-lockdown reopening, could be here to stay. That’s a piece of the logistics puzzle Amazon mostly still lacks.