what Technological World

One of the most consequential forces in technology is how and where you buy stuff, and U.S. online shopping has hit a wall. This might feel surprising if you see Amazon delivery vans chugging through your neighborhood, but e-commerce sales growth has slowed. This is hurting companies like Amazon and eBay that sell us stuff and tech titans, including Facebook, that rely on advertising from online merchants. The swing from pandemic e-commerce craze to malaise is one of the biggest things happening in technology, financial markets and the economy right now. The ripple effects of our shopping behavior have contributed to the current sad phase for the technology industry and falling stock prices. They also show how influential we are in the fate of trillion-dollar technology companies and the U.S. economy. The e-commerce sag could be temporary as people and businesses adjust and then readjust to the pandemic. In the meantime, the uncertainty about the future of our collective shopping habits is confounding normally confident corporate executives and forecasters. Let me recap what has happened with online shopping: When the coronavirus started to spread in the U.S. in the early months of 2020, we spent less on travel and services and more on physical goods, and we bought way more than we usually do from the safety of our internet connections. Some experts predicted that we had raced ahead to a future in which online shopping was a far larger part of Americans’ lives and budgets. And that did happen. E-commerce now appears to be a bigger chunk of Americans’ spending than it would have been if the pandemic had never happened. But the change was perhaps not as dramatic as some analysts had expected. And in 2021, possibly for the first time, in-person shopping in the U.S. gained ground on e-commerce. That difference between online shopping expectations and reality is starting to sink in, and it’s having surprising effects. Amazon during the first three months of this year posted its slowest sales growth in decades, and it warned of more of the same in the next few months. Amazon also said that it would pull back on expanding its warehouses, where some business was so slow that the company was sending workers home early. Its quarterly financial results prompted questions about whether Amazon’s e-commerce machine had peaked, although the pessimism could look silly in six months or a year if sales go through the roof again. This online shopping comedown isn’t confined to one company. Other e-commerce stars including Etsy and Shopify, whose software powers online businesses for millions of smaller stores, also posted unexpectedly low sales growth or low expectations for the near future. An analysis by Mastercard showed that U.S. online shopping purchases fell in March for the first time in nearly a decade, while in-store purchases climbed. It’s not surprising that e-commerce buying soared when people were hunkered down at home in 2020 and slid backward once many felt more comfortable shopping in person and were again eager to splurge on travel, eating out and other in-person activities. But companies didn’t really see this pendulum swing coming.