Real world retail
Few companies benefited from the pandemic as much as Amazon. Online sales soared and many wondered whether brick and mortar retail would recover.Well, it has.For a company that's been used to growing at 20%, 30% or even 40% over the last few years, yesterday's update was something of a shock: Amazon's e-commerce sales dropped by 3% and the company reported its first loss for 7 years.
Evidence from the UK
If you happen to have a keen eye on UK retail sales (who doesn't?) you might have seen this phenomenon coming. The UK has monthly data on internet sales as a % of total retail — and it's showed an interesting trend recently.
After years of gently trending higher, online sales shot to more than 35% of total UK retail sales during the pandemic, where many experts expected them to stay, as we adopted new habits permanently.
But in recent months online sales have pulled back. In fact, if you draw the trend line on the data pre-pandemic then online sales are not far off where they might have ended up anyway, had the pandemic never happened in a glorious alternative timeline. The quarterly data in the US shows a similar trend. Maybe we don't want to buy everything online after all.
