3 Trends Revolutionizing Retail

With consumers spending more time living and working from home, home retail sales exploded in 2020 and 2021. However, consumer behaviors have since evolved dramatically. Many workers have returned to the office. Air travel is in demand. Inflation and accompanying interest rates are at a high.

As the retail landscape changes, certain industries have been heavily impacted, such as Home retail. YipitData’s Home Goods Market Share Index has called out the shrinking market for Home retail pure players, a market decline that started in late 2021 and persists. But how are consumers spending their money across categories in today’s economy?

Using our proprietary email receipt data and licensed physical receipt panel, we analyzed category sales at retail giants Amazon, Target, and Walmart from 2020 to 2023 and noticed 3 prominent retail trends.

1. Consumer spending on Health nearly catches up with Home

Although the top three categories by GMV, 1) Food, 2) Home, and 3) Health have remained consistent for the past 4 years, consumer spending on Health products (including items such as over-the-counter medications, vitamins, and eye care products) closed the gap on Home spending, growing from $30.2 B in H1 2020 to $43.4 B in H1 2023. Meanwhile, Home, Clothing, and Electronics have had moderate to declining sales growth since 2022.

Generalist retailers include Amazon, Target, and Walmart

2. Beauty retail ages well in this economy with leading sales growth in 2023

While Beauty may only be skin-deep, Beauty retail sales growth has been profound. Beauty sales at generalist retailers have delivered double-digit growth for the past 3 years, with 24.3% GMV growth in H1 2023. Retailers have taken note of Beauty’s success, and have invested in partnerships to respond to the consumer trend. For example, Target expanded its shop-in-shop partnership with Ulta, offering a beauty store shopping experience for Target shoppers as well as the benefit of two reward programs, Target Circle and Ultamate Rewards.

3. Consumers continue to shell out more money on Pets

Pets are an integral part of many consumer households and an increasingly larger portion of consumers’ wallets. Not only does Pet retail have the second-highest sales growth in 2023, this retail category has had the most consistently robust sales growth for the past three years, growing from $10.8 B in H1 2020 to $17.8 B in H1 2023. To compete with Amazon’s membership perks, Walmart has invested heavily in pet retail. Walmart debuted Walmart Pet Rx, its pet prescription marketplace, in 2019, and started offering pet insurance and pet telehealth perks to Walmart+ members in May of this year.

Generalist retailers include Amazon, Target, and Walmart

Sources: In-Store Receipt Data, Proprietary Email Receipt Data