Good morning, Paul!
What advice were entrepreneurs getting during the pandemic? Go online and that they did, and many were rewarded with a timely decision to focus primarily on e-commerce as their business model. However, could that party be short-lived? Could all that be changing in this post-pandemic era? Looks like that may indeed be the case, given that e-commerce is beginning to cool. Now cooling is one thing, but to be sure e-commerce is not going away. Even the big guys, though, are feeling it as Wayfair, Etsy, and eBay, even Amazon, for example, are reporting falling online sales revenue currently.
What’s happening? Well, one might think that it’s an issue with overall consumer spending being pulled back, but that’s not it. In fact, retail spending overall is up 7.2% from this time last year. The issue for online sales is that, first and foremost, people are returning to do their shopping in store. MasterCard reports that in-store shopping increased 10% for the month of April while e-commerce sales slipped about 2%.
So what does all this mean for small business owners? Well, first of all, I view this as a likely market correction. People were at home during the pandemic and to fill their time many turned to online shopping. Some even viewed online shopping as a form of entertainment and spend they did even to the point of creating superheated sales online. And, of course, during the pandemic in-store shopping was either nonexistent or practically so. And now that the pandemic is over, we are returning to a more natural balance between online and in-store shopping, setting aside current economic conditions, such as inflation and its impact on consumer purchasing for those small businesses that set up shop online during the pandemic, even though there’s a downturn.
Now, there is no question that the future still holds tremendous opportunity and promise. The best approach these days is a blend between online and offline that offers consumers choice and creates an omnipresent opportunity for them to purchase from you wherever they want to make that happen. So stay the course, small businesses, in spite of the current economic downturn in online sales. This, too, shall pass,
Paul. I’m Jeff Sloan, founder and CEO of startupnation.com, and that’s today’s Business Beat on the Great Voice of the Great Lakes, WJR.
