In our August 2023 article, BrandMX stated that we foresaw a continued upward trend in e-commerce share of total U.S. retail sales while views from mainstream media and industry were that U.S. e-commerce was expected to “plateau”. Well, 2023 ended strong with e-commerce share at 15.6% vis-à-vis 14.6% at YE 2022.
In Qtr 4, 2019, pre-pandemic, U.S. e-commerce was at 11.2% of total retail sales, and spiked at 16.5% during “peak-Covid” Qtr 2, 2020. This trended downwards post-pandemic to 14.6% by Qtr 4, 2022. While the current share of 15.6% is up by just 1% this past year, it is significant in that it is closing in on the Covid spike of 16.5%. Perhaps, all this is telling of a new normal in consumer purchasing behavior.
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, and 2023’s strong year end – are all evident here.
Source: Retail Indicators Branch, U.S. Census Bureau, February 20, 2024
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.
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) and 54% at “peak” covid (March 17 to June 30, 2020). We dropped to 48% for FY 2021. However, in FY 2022 we were back up at 55%, and stayed at 55% through August 28, 2023.
We saw a dip in Qtr 3 and Qtr 4 2023 with FY 2023 closing at 52%. We attribute this to brick-n-mortar retailers ordering in bulk to stock their stores for the holiday season. YTD through February 21, 2024 is again trending upwards and e-commerce is at 54% of total sales.
The takeaway is that brick-n-mortar retailers are certainly making a comeback but are seasonal in their buying, and that steady growth in e-commerce continues to have staunch supporting factors: convenience of online shopping, large variety of products online, social commerce growth, ease of mobile shopping, and AR/VR retail experience (augmented and virtual reality simulating the “touch and feel” of products).
We will continue to observe and report back any new industry or internal findings.
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.