Apparel sales in the US rebounded sharply last month, driven by an increase in online purchases as consumers changed their spending habits, Mastercard executive vice president Linda Kirkpatrick told CNBC on Tuesday.
“We’ve definitely seen a change in the way consumers spend money during the pandemic,” Kirkpatrick, director of the US merchant and adoption department, told Power Lunch. “Almost three-quarters of all clothing purchases were online in February, up from 47% a year ago.”
Apparel sales declined 5.3% overall for the month, but e-commerce spending didn’t miss a beat. According to the Mastercard Economics Institute, online clothing sales grew 47% year over year. In February, the month of Valentine’s Day, total jewelry spending rose almost 6% year over year. Meanwhile, online jewelry sales rose 63%, the company said.
The increase in digital sales in both categories was due to retail sales increasing 5% year over year in February. This is compared to the levels prior to the economic shutdowns triggered by the coronavirus pandemic last year.
The new data is an early sign that more shoppers are getting used to buying clothes and jewelry digitally, and Mastercard expects the trend will take shape again as the economy reopens and more people move venture outside the house, said Kirkpatrick.
It’s also a welcome development for apparel manufacturers after apparel sales fell 19% in 2020 due to research by the NPD Group amid business restrictions and social distancing mandates to combat the spread of Covid-19.
Sweatpants and sleepwear sales improved during the pandemic as consumers sought more comfort for the home. However, data suggests that clothing purchases could pick up as optimism about the economy reopening grows.
According to FactSet, the credit card company saw total revenue declined 9% in 2020.
E-commerce sales increased 54.7% in February compared to the same month last year. While the move to digital technology had been underway for years, that adoption accelerated in 2020, two years ahead of schedule, the company said.
According to Kirkpatrick, Mastercard believes it can continue to grow in both e-commerce and brick-and-mortar contactless payment options.
“In the stores themselves, we’ve seen a significant shift towards contactless payments,” said Kirkpatrick.
“What we are seeing right now is consumers are adopting digital payments faster than ever,” she said. “Consumers have really built a muscle for digital commerce that we believe will stay here.”
Mastercard stocks closed slightly after hitting a 52-week high on Tuesday.
Comments are closed.