Coronavirus BRIEFING

Pandemic Accelerates Shift to Online Retail

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Over the past 20 years, e-commerce has steadily risen in size and reach. According to Statista’s Digital Market Outlook, more than 260 million Americans will make an online purchase this year, but how big is e-commerce really in the grand scheme of things?

According to data regularly published by the U.S. Census Bureau, the impact of online shopping on total retail sales in the U.S. has long been smaller than many people might think. In 2019, e-commerce sales accounted for just 11 percent of total retail sales (excl. food services), which was the highest share on record—until the pandemic hit the U.S.

As the chart from Statista.com shows, the COVID-19 crisis accelerated the ongoing shift to online retail. Faced with stay-at-home orders and store closures, millions of Americans resorted to shopping online, resulting in a 3-point jump in the online portion of total retail sales. According to the U.S. Census Bureau, e-commerce sales amounted to $792 billion in 2020, which is equivalent to 14 percent of total retail sales. That's up from just 7.3 percent in 2015, illustrating the pace at which sales have moved online over the past few years and particularly in 2020.

While 14 percent still doesn’t seem like a lot considering the perceived role of online retail, it needs to be noted that total retail sales include categories such as motor vehicle and parts dealers, gas stations and of course grocery stores, where e-commerce still plays a very minor role. Other categories, most importantly clothing and footwear, are seeing significantly higher shares of online sales already.