Read our full analysis for a more in-depth look at these trends.
Brick-and-mortar retail: Weaker foundations
The pandemic-era rise in online retail spending has continued, posing real challenges for brick-and-mortar stores.
June 2023
Key takeaways
- The share of online retail spending (as compared to brick and mortar (B&M)) rose over the pandemic as social restrictions made in-person B&M spending difficult. However, even though the pandemic-era restrictions have lifted, the online share has not declined.
- Bank of America aggregated and anonymized card data shows that the rise in online spending occurs across both income levels and generations, which poses big challenges for physical retail — our measures of spending in malls and in central business districts (CBDs) show that spending remains very weak in these areas.
- B&M retailers are responding to these challenges by offering better in-person services, as well as embracing customers who browse in store but buy online. But these strategies have their limits and may ultimately require fewer and smaller stores. So B&M retail spaces will need to continue to think creatively, including by taking advantage of the demand for services.
