Data shows the percentage share of e-commerce in total US retail sales, which is still up from pre-pandemic levels, has started to drop as in-store sales rise
E-commerce retailers that rode a surge of online purchases in 2020 are now grappling with the fact that some customers have returned to stores Tweets: @htsfhickey , @kjlabuz , @stevenpdennis , @iiiitsandrea , @aparanjape , @sebasaherrera , @gopalgautham , and @neilretail Tweets: Fred Hickey / @htsfhickey : Very interesting WSJ story that ties into my earlier Amazon tweet. Most investors don't want to consider the possibility online purveyors' numbers might have been inflated by COVID-related effects because everybody (especially Wall St.) owns those stocks https://www.wsj.com/... Kevin LaBuz / @kjlabuz : “March was the first month since the pandemic hit during which e-commerce sales declined from the same period a year earlier while in-store sales rose, according to Mastercard...The drop in online spending was 3.3%.” https://www.wsj.com/... $AMZN $ETSY $W https://twitter.com/... Steve Dennis / @stevenpdennis : More online shoppers are going offline https://www.wsj.com/... via @WSJ Someone should have written a book about this. Oh wait.... @iiiitsandrea : This was pretty obvious for American shoppers bc data even during pandemic showed preference towards BOPIS (buy online pick up in store) Specifically when it comes to grocery, we still crave IRL discovery/selection doesn't mean URL is going anywhere https://www.wsj.com/... Amit Paranjape / @aparanjape : Interesting. In India, e-commerce has picked up further (yes, from a much lower base) “When millions of locked-down Americans went online during the Covid-19 pandemic, it looked like the possible start of a permanent shift in consumer behavior.” https://www.wsj.com/... via @WSJ Sebastian Herrera / @sebasaherrera : The pandemic boosted e-commerce to unforeseen heights that many thought would last. It hasn't. W/ @rudegeair & @CharityLScott https://www.wsj.com/... Gautham Gopal Vadakkepatt / @gopalgautham : Now who would have thought that, really?!?! Economics of stores, persistence of human habits, and shopping as an experience are hard to overlook. The Pandemic Was Supposed to Push All Shopping Online. It Didn't. https://www.wsj.com/... Neil Saunders / @neilretail : There was an enormous amount of hyperbole about online during the pandemic. Some of it was complete nonsense - as the numbers are now showing. The truth is that a lot of people like in-person shopping and don't want to sit at home in front of a screen all day. https://twitter.com/...
Context & Ripple Effects
The 2020 lockdowns pulled forward years of e-commerce adoption in months — US consumers spent a record $710B online that year, lifting e-commerce's retail share to 14.5%, and analysts treated it as a potentially permanent shift, sending e-commerce stocks soaring. Retailers responded by building omnichannel capacity, with chains like Target leaning into curbside pickup while Amazon absorbed the demand surge.
The new data marks the correction phase of that arc: e-commerce's share of US retail has fallen almost back to pre-pandemic levels, with March showing an outright YoY decline in online sales as in-store spending recovered. The UK's post-pandemic experience offers a preview of what that means for pure-play online retailers squeezed on logistics and by store-based rivals.
First-order effects
- Online retailers that scaled fulfillment and headcount for the 2020 surge are now carrying excess capacity against demand that is shrinking in both absolute and share terms.
- Investors are repricing the 'permanent shift' thesis from 2020 — Fred Hickey's commentary flags that Wall Street has been reluctant to accept that pandemic-era e-commerce numbers were inflated by one-time conditions.
Second-order effects
- Store-based chains that invested in curbside pickup and buy-online-pickup-in-store during the pandemic now have working omnichannel infrastructure to capture returning shoppers, validating those capital outlays.
- Pure-play e-commerce players face margin pressure from underutilized logistics networks, echoing how UK online clothing retailers saw their challenges compounded when shoppers went back to physical stores.
Third-order effects
- If the pattern holds, retail consolidates around omnichannel operators rather than channel specialists, with physical footprint re-emerging as a competitive asset instead of a liability.
- The episode becomes a case study in extrapolating crisis-driven adoption curves: capital markets and operators alike over-indexed on a temporary demand shift, a dynamic likely to shape how future 'accelerated trend' theses get underwritten.
The trend: Post-pandemic retail is normalizing toward a hybrid channel mix where e-commerce keeps its absolute gains but cedes share back to stores, rewarding retailers that built bridges between the two.