Trade in Clothing and Home Appliances Migrates to the Internet
German consumers are increasingly getting used to buying clothing, household goods, and home appliances online. This is a finding of a recent evaluation by the ifo-N26-Economic Monitor. The researchers compared offline and online purchases in 2020–2021 to the pre-pandemic situation. When stores began reopening in summer 2020, the ratio of offline to online trade almost returned to pre-crisis levels. Since then, online sales have grown nearly continuously, reaching 250 percent of pre-crisis levels for household appliances at the beginning of December and as much as 350 percent in February.
“Since last summer at the latest, we have been observing massive structural shifts toward online business – even following the lockdowns. Our data suggests that the crisis is hastening the death of city centers,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies. Since the beginning of December, stationary retail purchases in the two product groups studied – which are traditionally made at downtown shops and department stores – have been below the level of the previous year, bottoming out in January 2021. An earlier study had already revealed that consumer savings increased by about 20 percentage points in the first lockdown and by another 20 percentage points or so in the second. “People will release this pent-up purchasing power in the second half of 2021. Retailers have until then to come up with a way to get people back into their stores,” Falck says.
The evaluation was carried out as part of the ifo N26 Economic Monitor, a collaboration between the ifo Institute, TU Munich, and N26. By analyzing aggregate spending patterns, the researchers can measure certain aspects of economic recovery. Key indicators are consumer spending and savings of N26 customers in the largest European economies.
