Linda Kirkpatrick, president of Mastercard North America, told CNBC on Tuesday that US apparel sales fell sharply over the past month, driven by an increase in online purchases as consumers changed their spending habits.
“We’ve definitely seen a change in the way consumers spend money during the pandemic,” Kirkpatrick said at 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 around 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 in the wake of 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 payment company saw its total revenue fall 9% in 2020.
E-commerce sales rose 54.7% in February compared to the same month last year. While the move to digital had been underway for years, that rollout accelerated in 2020, two years ahead of schedule, the company said.
According to Kirkpatrick, Mastercard believes that more progress can be made in both e-commerce and contactless payment options in brick and mortar locations.
“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.
Correction: This story has been updated to reflect that Linda Kirkpatrick is President of Mastercard North America.