“During the pandemic, we also saw rapid changes to consumer behavior as many once in-person activities moved to digital formats. The technology sector had a meteoric rise due to this rapid digitization across all industries, which was necessary to adjust to new consumer behaviors,” Araghi said. “Most companies had planned to make tech investments over the next three to five years. This was expedited this past year out of necessity.”
She added, “E-commerce investment will also likely continue at a rapid pace, coupled with brick and mortar. Consumers want the flexibility of online shopping, but [they] also value the in-store experience and expect more from it.”
Transaction processing companies also benefited from the pandemic. Online consumer spending with U.S. merchants was up 44% year over year in 2020, the highest annual increase in more than two decades and nearly triple the 15.1% year-over-year increase in 2019, according to Digital Commerce 360 estimates. “Companies and businesses that have adjusted and created more digital capabilities benefited from this trend during the pandemic, and we believe will continue to do so in the future,” Araghi said.
“As you might expect, with the growth of e-commerce, we have also seen the use of credit card and other online and phone money transfer services accelerate during the pandemic, and we expect this to continue,” she said.
“We are beginning to see inflation across the board impact consumer goods and experiences due to increased raw material, labor and freight costs,” Araghi added. “For the most part, brands are passing the higher costs to their customers. We also see tremendous pent-up demand to socialize and spend. And so far, consumers are willing to pay for experiences they missed during lockdowns.”