E-commerce companies are currently witnessing declining sales as people return to shopping at brick-and-mortar stores with the reopening of the economy. Furthermore, shipping delays, delivery charges, and the capacity for in-person product evaluation have shifted consumer preference back toward physical stores. Therefore, we think investors are better off avoiding e-commerce stocks Etsy (NASDAQ:ETSY) and Wayfair (NYSE:W), which possess bleak financials. Read on.The e-commerce industry benefited enormously from the pandemic-led lockdowns last year, with a dramatic shift in consumer preference toward online shopping. Many conventional brick-and-mortar stores transformed their business strategies to boost their online presence in response to shifting customer behavior.
However, with significant progress in vaccinations and the easing of social distancing rules, brick-and-mortar stores have witnessed a substantial increase in foot traffic over the past few months. In addition, researchers found that approximately 40% of consumers prefer in-store shopping over online due to high delivery charges, shipping delays, and the opportunity to examine products in person before buying.
The increasing popularity of physical stores may make it difficult for e-commerce companies with bleak fundamentals to stay afloat. Therefore, we believe fundamentally weak e-commerce stocks Etsy, Inc. (ETSY) and Wayfair Inc . (W) are best avoided now.