COVID-19 has changed everything about the way we live, and this trend doesn’t seem to be pausing for the holidays. Parties are significantly smaller or nonexistent, many out-of-state family members won’t be returning home, and tree lighting ceremonies have gone virtual.

And while the spending habits of gift buyers have also changed, consumers are still shopping for presents for their loved ones. The infamous Black Friday shopping has been slowly moving to a more virtual market, but this year has seen the highest increase in e-commerce retail sales.

To discuss how the pandemic is affecting both merchants and consumers during the 2020 holiday season and how it will alter future holidays, PaymentsJournal sat down with Jennifer Sherman, SVP of Product at NMI, and Raymond Pucci, Director of Merchant Services at Mercator Advisory Group.

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E-commerce trends and projections

2020 has certainly been an unprecedented year, and as we enter into the final quarter during the holiday season, high e-commerce numbers are expected. According to the chart below, in 2019, when pandemic was just a dramatic word used in cinema, there was already an 11% increase in e-commerce sales.

Retail vs Travel E-commerce Sales

While travel is down a whopping 75%, 2020 is estimated to see a 17% increase in e-commerce sales, 6% higher than the previous, non-pandemic year. “And I wouldn’t be surprised, given that Q4 brings the holiday season, we might even be closer to 20% year-over-year increase in e-commerce retail sales for the U.S. market,” said Pucci.

Although that number is expected to drop over the next two years as the pandemic abates, there is still a predicted 10% increase from 2020-21 and a 12% increase from 2021-22.

Merchant success during this holiday season

While the global pandemic may be on the naughty list, consumers are still buying for those who are nice. Retailers everywhere have had to alter their sales operations in ways that make customers feel that shopping is safe, secure, and hassle-free. This can mean many things, both for in-person transactions and online shopping. “NMI has recently done a