Shopping, Near and Far: Local Commerce in the Digital Age
JPMorgan Chase Institute, 2018
36 Pages Posted: 12 Jan 2019
Date Written: December 2018
The JPMorgan Chase Institute expanded its lens on local commerce, specifically looking at online commerce and how it has grown, who has driven that growth, and how it has impacted brick-and-mortar merchants. Building off a de-identified sample of 4 billion credit and debit card transactions from nearly 7.7 million Chase customers across the US, we provided an unprecedented view of the online economy in the US, with additional detail on 14 metro areas. We found that online spending has increased steadily in recent years, while brick-and-mortar spending has lagged. From April 2015 to March 2018, online spending grew at an average monthly rate of 11.8%, while spending at brick-and-mortar merchants grew at just 0.2% on average. Moreover, the share of observed card spending through online channels was 39.2% in 2017. There was variation in the share of online spending across metro areas, but it remains above 33% in every metro we track. Furthermore, there was variation in the types of goods and services that consumers purchase online versus in brick-and-mortar stores. For example, food and grocery purchases dominate all offline transactions, whereas the top three spending categories for non-local online purchases are telecommunications, financial/insurance services, and air transport/services. Additionally, we found that the growth in online commerce has been driven by sales at non-local retailers and the share of non-local spending is increasing in every metro area we track. Finally, while all ages and incomes participate in online spending growth, high income consumers between the ages of 35 and 54 are the dominant contributors to that growth.
JEL Classification: H10
Suggested Citation: Suggested Citation