The U.S. online retail industry has seen significant growth in recent years, with a 7.5% increase in sales year over year in the first seven months of this year, according to data from the U.S. Census Bureau. This growth has been driven by the increasing popularity of online shopping, which has been accelerated by the COVID-19 pandemic.
According to a report from Publicis Commerce, online sales totaled $550 billion in the first seven months of the year, accounting for about 22% of core retail sales revenue. This growth outpaced the overall core retail sales growth rate of 3.1%, with e-commerce accounting for half of all core retail growth in 2024.
The pandemic has played a significant role in pushing online sales ahead by at least three years in just a few months. In 2020, total online sales rose by 41.7% to $807.1 billion, and in 2021, online sales continued to grow, reaching $950.5 billion, up 17.8% from the previous year. Online sales surpassed $1 trillion in 2022, growing by 6.5%, and reached $1.1 trillion in the following year, up 8.9%. For the full year of 2024, e-commerce sales are forecasted to grow by 10.95% to $1.12 trillion.
Jason Goldberg, chief commerce strategy officer at Publicis Groupe, highlighted that the growth of e-commerce has become the primary engine for all of retail in 2024. Online sales have more than doubled since 2019, increasing by 117% in the first six months of 2024.
However, Goldberg also pointed out the widening divide between retail’s winners and losers. While overall retail grew by 3.1% in the first half of 2024, the two largest U.S. retailers, Walmart and Amazon, experienced significantly higher growth. Walmart reported a 22% increase in U.S. online sales, while Amazon’s e-commerce sales rose by an estimated 10.5%.
In terms of market share, Amazon controlled about 16% of the online market share through July, with Walmart close behind at 15%. Three emerging retailers, Temu, Shein, and TikTok Marketplace, are also gaining a notable share of the U.S. online retail market. TikTok Marketplace holds about 13% of the share, Temu has 4%, and Shein has 3%. Together, these five retailers account for 51% of the online dollars spent in the first half of the year, leaving just 49% for all other retailers, regardless of their size.
The article also delves into the specific growth strategies and successes of major retailers like Walmart, Target, Costco, Best Buy, Nordstrom, and Abercrombie & Fitch in the online retail space. These retailers have seen varying degrees of growth in their online sales, with some reporting significant increases in digital revenue.
Overall, the article highlights the significant growth and impact of e-commerce on the retail industry, with online sales becoming a crucial growth engine for many retailers. The shift towards online shopping is expected to continue, with e-commerce playing an increasingly important role in the retail landscape.
