Since the end of 2019 large industries across the world have struggled. The combination of a widespread pandemic, supply chain disruptions, lockdowns, and inflation have caused long lasting damage to businesses.
However many areas of the Ecommerce industry flourished as customers increased online spending, partly by choice, and partly by necessity. We saw this first hand here with clients in our email marketing agency – Ecommerce Intelligence.
We pulled and analyzed 18 different datasets on the US Ecommerce market from 2020 to today. This article contains some of our most interesting findings around the performance of US Ecommerce during the pandemic era.
Here are the data points we’ll be exploring in this article:
Overall US Ecommerce sales jumped 65% during the pandemic and will likely hit 848 billion by the end of 2022
The pandemic did not affect the incredible growth of either E-commerce or M-commerce which has been unwavering for the last 10 years. If anything, since 2020 more people have become comfortable spending large amounts of money online where their usual in-store options were temporarily not available.
Key Takeaways:
- The COVID-19 pandemic pushed US Ecommerce sales to unprecedented heights.
- Between 2019 and 2021 online retail sales value grew 65%.
- Sales are projected to reach $848 billion by the end of 2022.
- Mobile sales nearly doubled between 2019 and 2021, expected to reach $329 billion in 2022.
Sources: 1 – Euromonitor. 2- Euromonitor.
The Ecommerce share of US retail sales grew by 36% during the pandemic
The Ecommerce contribution to total retail sales volume in the US is growing rapidly and showing no signs of slowing down. However, Ecommerce still only accounts for 14.3% of retail sales. We consider this to be a relatively small amount and see huge potential for further growth over the next decade.
Key Takeaways:
- Of every $100 spent by retail consumers, $14.30 is online. Ecommerce represents 14.3% of all retail sales.
- This share is projected to rise to 24% by the end of 2023.
Sources: 1 – U.S. Census Bureau. 2 – Statista.
Food was the fastest growing Ecommerce category during the pandemic
Shopping for food and drinks online exploded during the pandemic era. These were by far the fastest growing sectors in the market.
Key Takeaways:
- Between 2019 and and the end of 2022, food and beverage Ecommerce revenues are predicted to grow 134%.
- The Toys, Hobby & DIY category also saw impressive growth with a 107% increase over three years.
Source: Statista.
There has been a strong positive correlation between inflation and Ecommerce share of retail sales.
Of course correlation does not indicate causation, however Ecommerce revenues continue to grow even when inflation is outpacing wage growth.
Key takeaways:
- In 2022 the US rate of inflation hit 8.6%. Levels that have not been seen since 1982.
- The pandemic fueled the Great Resignation. Employers boosted wages 4.4% to attract talent.
- Ecommerce sales continued to grow to 14.3% of all US retail sales.
Sources: 1 – U.S. Bureau of Labor Statistics. 2 – U.S. Census Bureau.
Stocks of US Ecommerce companies achieved 203% cumulative returns since 2017, vastly outperforming the S&P 500
Even though most major stocks have suffered heavy losses in 2022, Ecommerce companies have still seen cumulative returns of over 200% since 2017. This is after a drawdown of approximately 50% during the first half of 2022.
Key takeaways:
- The pandemic triggered a significant Ecommerce surge despite supply chain challenges.
- In 2020, Ecommerce stocks returned 120% vs. 17% for S&P 500 companies overall.
- Like most companies, Ecommerce stocks suffered large losses during Q1 & Q2 of 2022.
Source: Trefis
Etsy & Amazon have been star performers. Etsy saw 512% returns since 2017, followed by Amazon’s 183%
Key takeaways:
- Large stores continued to thrive, despite the increased stress placed on global supply chains during the pandemic.
- As of Q1 2022 Amazon generated total net sales of $116 billion, up from $75 billion in Q1 2020.
- Amazon’s growth significantly outperforms overall growth in the US retail market. Etsy’s growth is even more impressive.
Source: 1 – Euromonitor.
The number of online shoppers in the US is on track to hit 291 Million and 80% penetration by 2025
Key takeaways:
- During the pandemic era Ecommerce penetration grew by 74%.
Source: 1 – Statista.
The average annual Ecommerce revenue per customer is expected to reach $1,885 by the end of 2022
Despite years of uncertainty, the average annual Ecommerce spends for customers in the US have continued to increase.
Key takeaways:
- The average customer spend annually is expected to hit $1885 by the end of 2022. This is a 52% increase since 2017.
- Food and Beverages have seen the biggest increases over the last 5 years, with annual spend increases of 85% and 84% respectively.
Source: 1 – Statista
During the first year of the pandemic Ecommerce average order values grew by 27%
Average order values continue to increase. Mobile purchase sizes are catching up to desktop purchase sizes over recent years.
Key takeaways:
- US Ecommerce companies enjoyed a large order value increase between Q3 2020 and Q3 2021.
- Desktop devices remain most popular for larger online shopping purchases, but Mcommerce saw highest increase in average order value (30%, vs. 26% for desktop purchases).
The usage of E-wallets grew 22% during pandemic
Key takeaways:
- E-Invoices and E-wallets are the fastest-growing payment methods in US Ecommerce.
- PayPal is still the most popular E-wallet among top US online stores. Only 19% offer payments with Apple Pay, and 7% with Google Wallet.
Summary
Ecommerce in the United States was already on an incredibly strong growth trajectory before the pandemic in late 2019/early 2020. The sector was able to maintain this growth, and in some areas even increase it, despite some of the largest global challenges we’ll see in our lifetimes.
Even after a decade of strong growth the total Ecommerce contribution to US retail sales is 14.3% which suggests a lot of potential upside left for the industry over the coming years. We’re excited for the sector’s future growth here at Ecommerce Intelligence, and we’ll be helping brands to take advantage of this trend by continuing to offer market leading Ecommerce email marketing services to online retailers across the United States in many different industries.