COVID-19's Impact on the Evolution of Online Sales

Online sales exceeded their pre-pandemic high in July. As part of tracking retail sales’ recovery, it continues to be interesting to examine how the COVID-19 shock has affected the evolution of online sales. In July, in-store retail sales remained the vast majority of all retail sales at 84%. Non-store sales, which are mostly online sales, accounted for the remaining 16% of sales.

The long-term trend has been to online sales, but consumers still do most of their shopping at traditional brick-and-mortar stores. Prior to the pandemic, online sales accounted for around 13% of all sales, but that spiked to over 19% in April at the height of the pandemic as consumers stayed home and ordered more online.

Since April, online sales’ share of all retail sales has fallen for three consecutive months and is now at 15.7%. That is elevated from pre-pandemic levels, but considerably lower than the April high. The decline was slight in July compared to June.

The question is whether online sales will continue to decline closer to the pre-pandemic level and resume their long-term increase from that level, or whether they will remain elevated and continue to grow. They will continue to grow, but it remains to be seen how large a one-time shift, if any, occurs because of the pandemic.

Why it matters: Aside from being an interesting behavioral change to observe, this shift matters for brick-and-mortar sellers that do not also have an online presence. They could permanently lose customers and see revenues decline. It also matters for the financiers of these retailers if the shift is large enough that the viability of the businesses becomes questionable.

Source: Tennessee Chamber of Commerce & Industry

The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit



Published August 28, 2020