I don't know, I'd say that the overwhelming majority of cyclists that I see use backpacks. Second to that would be rack mounted trunk bags, and third's probably split evenly between panniers and shopping bags hung on handlebars.

I used a backpack for almost ten years, before acquiring a bike with a rear rack, and later a set of panniers, and I only got those for carrying large, heavy loads, like groceries, textbooks, and recycling. I didn't initially intend to replace my commuting backpack with a pannier, but the experience of cycling without a backpack was so much more pleasant that I ditched the pack without a second thought.

I work in a restaurant, so employee storage is a communal space, and other than work shoes, we can't leave anything overnight. A single pannier takes up no more room than a backpack, and when loaded with mostly clothes (a single change in the summer, loads more in the winter [extra hat, second pair of gloves/mittens, extra thermal shirt, second neck warmer, ski goggles, extra socks, chemical hand warmers, insulated vest]), a towel, a book, and u-lock, it doesn't weigh enough to noticeably effect the bike's handling, and it's waterproof.