This decline in online shopping isn’t limited to one company. Other e-commerce stars including Etsy Other Shopifywhose software powers the online businesses of millions of smaller stores, it has also experienced unexpectedly low sales growth or low expectations for the foreseeable future. An analysis of Mastercard showed that online purchases in the US fell in March for the first time in nearly a decade, while in-store purchases increased.
Unsurprisingly, ecommerce purchases soared as people hunkered down at home in 2020 and slipped back once many felt more comfortable shopping in person and were again eager to indulge in the luxury of traveling, dining out and other in-person activities. But companies didn’t really see this pendulum swing coming.
Facebook’s parent company Meta said last month that it is suddenly more advertising sales it was partly due to the fact that online shopping companies became less willing to buy ads on Facebook when their sales were under pressure. “The acceleration of e-commerce has led to massive revenue growth, but we are now seeing a resurgence of this trend,” Mark Zuckerberg told Meta investors two weeks ago.
And Meta said last week that it was slowing down their hiring.
All this cost reduction and lack of confidence in the future would have seemed insane six months or a year ago when Meta, Amazon, Google and other tech companies had Extraordinarily high income and profits.
The question this raises is whether we have misjudged the past two years of technology-driven changes in consumer behavior. Yes, some of us who have gotten back into the habit of making multiple purchases from home and zooming in will continue to do so. But there was a return to the behaviors of 2019, also. Last week, I shook hands with everyone at a business meeting and wondered what happened to the prediction that the virus would put an end to the handshakes.
We still don’t know what “normal” looks like in the United States or elsewhere, and we probably won’t for a year or more as our spending habits adjust to higher prices, continuing difficulties with manufacturing and shipping, shipping rates. increasing interest, coronavirus infections and a desire to joke in the real world.
The new normal for shopping probably resembles neither the return of brick-and-mortar stores we’ve seen in the past six months nor the surge in online shopping since 2020. It’s hard to predict the collective behavior of millions of Americans. And this is making all the technology shiver.