This online shopping is not limited to just one company. Other e-commerce stars, including Etsy and Shopify, whose software empowers online businesses for millions of small stores, have also reported unexpectedly low sales growth or low expectations in the near future. An analysis by Mastercard showed that online shopping purchases in the US fell in March for the first time in almost a decade, while in-store purchases increased.
Not surprisingly, e-commerce purchases increased when people drowned at home in 2020 and moved back, when many felt more comfortable shopping and still wanted to travel, eat, and engage in other personal activities. But companies have not really seen this rocking approach.
Facebook’s parent company, Meta, said last month that its sudden advertising sales were partly due to the fact that online store companies were less willing to buy ads on Facebook when their sales were under pressure. “The acceleration of e-commerce has led to a huge increase in revenue, but we are now seeing a reversal of this trend,” Mark Zuckerberg told Meta investors two weeks ago.
And Meta said last week he was slowing down hiring.
All of these cost reductions and a lack of confidence in the future looked wild six months or a year ago, when Meta, Amazon, Google and other tech companies had surprisingly large revenues and profits.
This raises the question of whether we have misjudged the technology-induced changes in consumer behavior over the last two years. Yes, some of us who have become more accustomed to shopping from home and scaling everything up will continue to do so. But 2019 behaviors are also back. Last week, at a business meeting, I shook hands with everyone and wondered what happened to the prediction that the virus would end up seizing the hand.
We still do not know what “normal” looks like in the US or elsewhere, and we probably do not know for a year or more as our spending habits adapt to higher prices, production and shipping difficulties, and rising interest rates. Corovirus infections and the desire for fun in the real world.
The new shopping norm is probably not like either the return of physical stores we’ve seen in the last six months or the growth of online shopping since 2020. It is difficult to predict the collective behavior of millions of Americans. And that shakes the whole technology.