Consumers spent $517.36 billion online with U.S. merchants in 2018, up 15.0% from $449.88 billion spent the year prior, according to a new Internet Retailer analysis of industry data and historical U.S. Commerce Department figures. That’s a slight slowdown from 2017, when online sales grew 15.6% year over year, according to Commerce Department figures.
Total retail sales, not including the sale of items not normally bought online like fuel, automobiles and food at restaurants, hit $3.628 trillion last year, up 3.9% year over year from $3.490 trillion, Internet Retailer’s analysis of the U.S. Commerce Department’s total retail sales figures shows. The U.S. Department of Commerce’s release of year-end retail data has been delayed until mid-March due to the federal government shutdown.
Ecommerce represented a growing share of the retail market in 2018, taking a 14.3% share of total retail sales last year, up from 12.9% in 2017 and 11.6% in 2016.
More significant is that ecommerce sales represented more than half, or 51.9%, of all retail sales growth. This is the largest share of growth for purchases made online since 2008, when ecommerce accounted for 63.8% of all sales growth.
Ecommerce had a strong start to 2018. Through the first three quarters of the year, online sales grew a strong 15.5%, which was higher than the previous three years. In 2017, sales were up 15.2% through the first nine months, and up 14.6% during the same period in 2016. But several indicators show a consumer spending slowed down in December, which may have contributed to slower-than-expected growth in the fourth quarter.
For one, the U.S. Commerce Department reported December nonstore sales grew just 3.1% compared with December 2017. Nonstore sales mainly take place online but also include other channels, such as mail and telephone orders, door-to-door sales and sales through vending machines.
Secondly, U.S. consumer confidence declined in November and December, after hitting an 18-year high in October. Consumer confidence, which is based on a survey that measures consumer sentiment on current economic conditions and prospects for the next six months, dropped to 126.6 in December from 136.4 in November and 137.9 in October, according to The Conference Board Consumer Confidence Survey. Generally speaking, when consumers believe the economy is doing well, they feel more secure and are more willing to spend.
In the fourth quarter, Internet Retailer estimates U.S. ecommerce sales grew 14.4% to $162.18 billion from $141.72 billion.
Total retail sales, factoring out sales of automobiles, fuel and restaurants, reached $998.40 billion in the fourth quarter, a 3.0% increase compared with $969.79 billion in fourth quarter of 2017, according to Internet Retailer’s estimate. Ecommerce represented 16.2% of total retail sales in the fourth quarter, compared with 14.8% a year earlier.
Amazon.com Inc., No. 1 in the United States and in Internet Retailer’s 2018 Top 1000, continues to increase its strong hold of the U.S. retail market. Internet Retailer estimates that the total value of transactions from U.S. consumers on Amazon.com reached $206.82 billion in sales last year (including sales of Amazon’s own products and of marketplace sellers), a 16.3% jump from 2017.
This means Amazon alone accounts for 40.0% of U.S. online retail, and Amazon accounted for 43.3% of ecommerce gains in the United States last year. Amazon’s dominance in ecommerce is in large part thanks to its marketplace, which allows the retailer to sell millions of SKUs. More than one-third—176—of the merchants ranked in Internet Retailer Top 500 sell
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