Apparel sales in the U.S. bounced back in a big way last month, powered by a surge in online purchases as consumers altered their spending habits, Mastercard executive vice president Linda Kirkpatrick told CNBC on Tuesday.
“We’ve definitely seen a shift in the way consumers are spending throughout the pandemic,” Kirkpatrick, head of the U.S. merchants and acceptance division, said on “Power Lunch.” “Almost three-quarters of all apparel purchases were made online in February, and this is up from 47% just a year ago.”
Apparel sales overall declined 5.3% during the month, but e-commerce spending didn’t miss a beat. Online clothing sales spiked 47% year over year, according to data from Mastercard Economics Institute. February, the month of Valentine’s Day, also saw overall spending on jewelry rise almost 6% from the year prior. Meanwhile, online jewelry sales jumped 63%, the company said.
The increase in digital sales for the two categories came as retail sales as a whole in February rose 5% year over year, the company said. That’s compared with levels that preceded last year’s economic shutdowns triggered by the coronavirus pandemic.
The new data is an early sign that suggests more shoppers have adapted to buying clothes and jewelry digitally, and Mastercard expects the trend to continue to take shape even as the economy reopens and more people venture outside the home, Kirkpatrick said.
It’s also a welcome development for apparel makers after clothing sales suffered a 19% decline in 2020, based on research from The NPD Group, in the midst of business restrictions and social distancing mandates put in place to combat the spread of Covid-19.
Sweatpants and sleepwear sales did improve amid the pandemic as consumers sought more comfort wear for the home, but data suggests that dress purchases could be on the rise as optimism grows about the economy reopening.
The credit card company reported a 9% drop in total revenues in 2020, according to FactSet.
E-commerce sales in February surged 54.7% when compared with the same month last year, the company found. While the shift to digital was in the making for years, that adoption accelerated in 2020, two years ahead of schedule, the company says.
Kirkpatrick said Mastercard believes there’s more headway for growth in both e-commerce and contactless payment options in brick-and-mortar locations.
“Within the stores themselves, we’ve seen a clear shift to contactless payments,” Kirkpatrick said.
“What we’re seeing right now is consumers are embracing digital payments more rapidly than ever before,” she said. “Consumers, you know, they’ve really built a digital commerce muscle that we believe is here to stay.”
Shares of Mastercard closed up slightly after hitting a 52-week high Tuesday.
Source: Finance - cnbc.com
