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According to IBM’s annual U.S. retail Index, COVID-19 has accelerated retail trends by nearly five years.

As previously reported, the pandemic has caused a major shift in consumer behavior as it relates to online spending. And at the same time, IBM’s report states digital consumer engagement is the new normal. In the first quarter, the company’s data found a 13 percent growth increasing to a 26 percent growth in the second quarter. The company further projected e-commerce will grow by nearly 20 percent.

But IBM’s data also found large decelerations for department stores, among nonessential retailers with a 25 percent decrease in the first quarter and a 75 percent decrease in the second quarter. The company projects department stores to decline by more than 60 percent for the full year.

As e-commerce solidified itself as the safe way to shop during the pandemic, another trend in IBM’s report is the necessity for retailers to pivot focus onto omnichannel fulfillment capabilities. With many physical stores remaining closed, the company notes retailers need to do all they can to entice shoppers back through engaging in efficient channels such as buy online, pick up in store. This trend has included an uptick in customer fulfillment methods including curbside pickup and Instacart.

Another key takeaway is the pandemic’s effect on how consumers are redefining essential items. Notably, the coronavirus caused an immediate change to consumer behavior around purchase patterns causing recategorization of what was an essential purchase, while categories including groceries have seen an acceleration of 12 percent and alcohol sales have increased by 16 percent, clothing purchases declined. Notably, clothing sales were slightly offset by an increase in loungewear purchases.

A recent report by WWD found six retailers have dominated during the pandemic by offering the right mix of merchandise and a high level of service and fulfillment capabilities.

With the holiday season fast approaching, IBM projects growth in the electronic shopping format, building materials, and within the beer, wine and liquor category.

For More WWD Business News: 

Adobe’s Digital Economic Index Shows Slow Return to Brick-and-Mortar

What Trends Will Emerge as the Holiday Season Draws Closer?

EY’s Future Consumer Index Shows Global Consumers’ Continued Caution to Spend

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