Has U.S. e-commerce plateaued? “Not quite”, we say at BrandMX.

In late 2022, mainstream media and the retail trade were all abuzz that U.S. e-commerce sales as a percentage of total retail sales had plateaued. At BrandMX, we said that this was a temporary “dip”, and that share of e-commerce would continue to trend upwards.

In Qtr 4, 2019, pre-pandemic, U.S. e-commerce was at 11.2% of total retail sales, and spiked at 16.5% in Qtr 2 2020. This trended downwards post-pandemic, and seemingly plateaued at 14.6% by Qtr 4, 2022. We now see this at 15.4% in Qtr 2 2023.

The graph visualization shows the growth in U.S. e-commerce vis-a-vis total retail sales since the advent of internet shopping. The data points – pre-covid, covid “spike”, apparent plateauing, and recent upward trend – are all evident here.

Source: Retail Indicators Branch, U.S. Census Bureau, August 17, 2023 

Graph Visualization: BrandMX

Chart Notes: The numbers adjusted for seasonal variation, but not for price changes. Total sales estimates are also adjusted for trading-day differences and moving holidays. E-commerce sales are sales of goods and services where an order is placed by the buyer or price and terms of sale are negotiated over an Internet, extranet, Electronic Data Interchange (EDI) network, electronic mail, or other online system. Payment may or may not be made online.        

The 2020 “herd” projections of steep upward, perhaps limitless growth and e-commerce dominance has seemingly not come to bear. It may be that e-commerce is becoming more crowded as some industry experts say, or it may be that more consumers are now taking small pleasures by shopping in malls, grocers, and home goods stores.

The “muscle memory” of in-store shopping may have returned, however, e-commerce growth has many supporting factors:

  • Consumers will not forget the convenience of online shopping and the larger variety of products online
  • Social commerce growth (shopping is integrated into daily life and creates a community of shoppers with similar interests) plus continued influx of direct-to-consumer brands fuel e-commerce growth
  • Mobile shopping and AR/VR (augmented and virtual reality) are making their mark in e-commerce by increasing ease of shopping and simulating the “touch and feel” retail experience
  • B2B e-commerce growth is predicted to grow at 10% each year for the next five years, and B2B may overtake B2C as per industry news; this bodes well for overall increase and share increase of e-commerce

At BrandMX, our own multi-channel data shows that e-commerce as a percent of total retail sales is trending upwards after the post-covid “dip”: we were at 34% pre-covid (Jan 1 to March 16, 2020), 54% at “peak” covid (March 17 to June 30, 2020), dropped to 48% by Qtr 3 2020, and FY 2021 we stayed at a stable 48%. FY 2022 we were up at 55%, and have stayed at 55% YTD August 28, 2023.

All this strongly supports our e-commerce optimism and our belief that 2023–2024 will show e-commerce gaining a higher share of total retail sales.

We will observe and report back if the 2023 holiday season supports this with U.S. retail figures, and with data from BrandMX.

BrandMX is a multi-channel integrated network of retailers primarily selling premier and luxury products. Our retail channels include EDI integrated majors, e-commerce sellers, and brick-and-mortar stores.

Published by Deepa Dadlani


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