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Holiday Sales Surge Online as More People Work from Home

Holiday Sales Surge Online As More People Work from Home

Welcome to the new (online) economy.

As COVID-19 continues to impact the American economy, trends that were already in place are accelerating. Online sales continue to rise, due in part to the rise of working from home. These trends are expected to continue even after the pandemic is under control.

According to the Federal Reserve Bank of Atlanta, the number of work-from-home days among the American workforce is expected to triple post-pandemic. One in 10 full-time workers are forecast to work from home five days a week.1

This development should come as no surprise: more than half (56%) of the American workforce has a job that, at least part-time, can be performed remotely. The longer people work from home, the longer this trend will continue, even after the pandemic abates and employees can return to their places of work. In addition, those people who worked remotely before the pandemic will do so even more often after.2

Indeed, the economy we once knew will likely never return, according to Federal Reserve Chairman Jerome Powell. “We’re recovering, but to a different economy,” he said. The impact will be permanent, as the use of technology, automation, and telework continues to rise.3

Here Comes the Holiday Online Surge

More people working from home is leading to greater online sales this holiday season. Ecommerce sales shattered all records in 2020, as a national emergency was declared in March. Stores shuttered, employees who could stay at home were ordered to stay and work remotely —and online sales exploded. For the second quarter of 2020 alone, online sales jumped 44.4% year over year. That’s the highest second-quarter growth rate ever recorded.

The 2020 holiday season is poised to break records as well, as more than 75% of consumers plan to buy at least half of their gifts online.4 During the first 10 days of this holiday shopping season alone, online sales increased 21% year-over-year, according to Adobe Analytics.5

Indeed, a new poll predicted that—for the first time—more people will have done their Black Friday shopping online vs. in brick-and-mortar stores. Fifty-eight percent said they choose to shop online, with 41% in person. That’s a dramatic drop from the 61% who shopped in stores last year.6

Much of that is because consumers want to avoid walking through crowded aisles in stores packed with shoppers. Going forward, that may be less of a concern. For example, the traditional Black Friday rush to your local store may be a thing of the past, as big-box retailers across America close their doors the day after Thanksgiving to prevent massive crowds. Walmart was first to make the announcement—followed by Best Buy, Home Depot, Kohl’s, Dick’s Sporting Goods, and other major retailers. Ecommerce will no doubt be a benefactor of this new paradigm.

For those who do plan to visit brick-and-mortar stores this holiday season, 20% plan to buy online and use drive-in or curbside pickup—a significant increase over those who took that approach in 2019.

Overall, online sales during this holiday season are forecast to increase by 43%. Over 25% of total seasonal spending will occur online—accelerating to a benchmark that wouldn’t have been achieved for another four years if the pandemic hadn’t occurred. By comparison, only 19.2% of total e-commerce spending for 2019 occurred during the holiday season.

Another driver that is increasing online sales this holiday season is how consumer spending habits have changed in 2020. With travel and restaurant dining restricted—not to mention traffic in brick-and-mortar stores—consumers have more cash on hand to spend online. For 2020, nearly $39 billion in additional revenue from online sales is forecast. If there were no pandemic and online holiday sales increased at a normal rate, this level of online revenue would not have been achieved until 2022.

Into the New Year—and Beyond.

In the early days of the pandemic, online retailers were overwhelmed by the surge in sales volume—resulting in significant shipping delays. Going forward, these retailers should prepare for the new normal, where a growing number of consumers shop online more and more often.

The ongoing acceleration of e-commerce sales is putting new demands on parcel carriers, who have been reporting traditional, holiday-level volume since spring. An executive at one of the nation’s leading carriers says that since March, “shipping volumes have consistently been at Christmas peak or Cyber Monday levels every day.”7

As online shipping volume continues to increase this holiday season and after, what can online retailers do to meet the brand expectations of customers, such as on-time delivery?

For starters, select a fulfillment company that has strong relationships with leading parcel carriers. It’s one proven way to help ensure on-time delivery as the holiday surge continues. In times like these, you also need a fulfillment partner experienced with the complexity of omnichannel sales—and that has the nationwide fulfillment network, technology, and hands-on expertise to help take Your Business Everywhere™.

In times like these, you need TAGG.

[1]Federal Reserve Bank of Atlanta. “Firms Expect Working from Home to Triple.” May 28, 2020.

[2] “Work-At-Home After Covid-19—Our Forecast.”

[3] “The Economy As We Knew It Might Be Over, Fed Chairman Says.” November 12, 2020.

[4]Digitalcommerce360. “Online Holiday Sales to Surge 43% in 2020.” November 9, 2020.

[5]Digitalcommerce360. “COVID-19 Drives A Surge in Online Holiday Shopping.” November 11, 2020.

[6] “Black Friday 2020: More Americans Will Shop More Online Than in Stores For First Time Ever, Poll Claims.” November 26, 2020.

[7]Digitalcommerce360. “Online Holiday Sales to Surge 43% in 2020.” November 9, 2020.