May represented something of a milestone for nonstore retail sales. The sector’s share of total retail and food service spending hit 17.5% – the highest percentage ever (except for 18.8% in April 2020, which most decidedly is an outlier that likely will not be matched for years to come). 

Part of May’s achievement was the combination of steady growth in nonstore retail sales as all other major retail categories saw either declines or no growth, but it counts. 

Nonstore Retail’s Steady Climb Since the Pandemic

For obvious reasons, the Covid-19 pandemic supercharged nonstore retail sales. As recently as January 2020, they accounted for only 12.3% of total sales. At the beginning of 2019, nonstore retail was the fifth-largest retail category in dollar-denominated sales. 

By the end of lockdowns, it ranked second and has steadily gained on the motor vehicles and parts retail category. If trends continue, it’s conceivable that nonstore retail sales could exceed sales of vehicles and parts within a couple of years.

The pandemic also fueled big growth in payroll employment for parcel and local delivery, what the government somewhat quaintly calls “couriers and messengers.” During a time when most of the economy suffered from major employment deficits relative to the pre-pandemic economy, parcel and local delivery jobs soared. 

The connection between local delivery jobs and nonstore retail sales is obvious, and for many years, they were closely correlated. 

By the first quarter of 2022, however, payroll employment in local delivery had peaked — but nonstore retail sales kept rising. Why didn’t parcel and local delivery employment continue to rise, too? 

What Explains the Disconnect Between Sales and Delivery Jobs?

Several factors explain the disconnect. 

First is inflation. The Census Bureau reports retail sales in current dollars, so soaring inflation in 2021 and 2022 artificially inflated sales, distorting the implied unit volume. 

Adjusted for inflation using the Consumer Price Index for commodities, nonstore retail hit an all-time high in March 2021 and did not surpass that level again until the beginning of 2023. So, one reason parcel and local delivery employment stalled is that the volume of goods to be delivered did so as well.

Inflation does not fully explain the disconnect, however. Real (inflation-adjusted) nonstore retail sales began rising again in 2023. But local delivery employment was stagnant until very late in 2024. 

Omnichannel Distribution’s Growing Role

This is where distribution channels come into the mix. 

We tend to think of nonstore retail broadly as delivery of goods to homes or workplaces rather than goods purchased at brick-and-mortar stores, but the reality is more complicated. Goods purchased online but picked up curbside or even in-store apparently are treated in the data as nonstore retail, at least in many cases.

Retailers were playing around with this omnichannel distribution model even before the pandemic, which probably is one reason nonstore sales began to outpace delivery jobs slightly as early as 2016. The pandemic obviously accelerated curbside pickup and similar “delivery” options.

Digital Goods and the Invisible Delivery Economy

Another factor, potentially an even larger one than omnichannel distribution, is the fact that not all nonstore retail purchases must be delivered to the buyer — at least not in a physical sense. Purchases of digital downloads, such as computer software, music, movies, etc., have significantly accelerated since 2020. 

Real spending on computer software and accessories stabilized in 2021-2022 but took off again in early 2023. Coincidentally or not, the beginning of 2023 is when local delivery employment and real nonstore retail sales diverged. Sales rose strongly, while jobs were basically flat until the end of 2024.

In the end, maybe it’s not that delivery jobs are out of sync with nonstore sales — it’s that our assumptions about what counts as “delivery” haven’t kept up with the digital world’s tendency to redefine everything.