E-Commerce Sales

E-commerce sales have increased every year since 1998. The Dot Com boom of the late 1990s catapulted online shopping to a national phenomenon, bringing the value of all sales over $1.0 billion for the first time ever. Online ordering offers several advantages over going to a brick-and-mortar store, such as the ability to find desired products quickly, a wider selection and convenient delivery. Retailers of myriad products, from food to automotive parts to electronics, have increasingly relied on e-commerce to conduct business. Furthermore, as online platforms become more sophisticated, consumers find buying some products online easier than traveling to a local brick-and-mortar retailer. The proliferation of mobile devices has also supported this trend, and in some product categories, online sales via mobile devices have surpassed PC sales.

Moreover, many retailers have increasingly expanded their online presence to target and influence particular customer bases, notably with the use of interactive content, videos and Instagram sponsorships, among other methods. In particular, mobile purchases are consistently rising as a share of total e-commerce sales, which has incited some retailers to tailor their digital content for mobile viewers. As a result of the proliferation of cellular phones with internet connections and nearly ubiquitous Wi-Fi hot spots around the country, e-commerce sales experienced double-digit growth every year, with the exception of 2008 and 2009, when the recession suppressed all retail sales. While the strong growth in e-commerce sales is expected to continue, the trend will somewhat taper off as online shopping becomes the norm.

Similarly, online only and direct to consumer retailing has grown substantially over the period. Consumer, especially in Urban areas are increasingly relying on online shopping. The variety of products offered online has expanded to allow many consumers to have everything delivered straight to their door step. Many companies, such as Amazon, allow consumers to place reoccurring online orders for household items that you need on a monthly basis. This retail platform has accelerated in its adaptations from consumers.

In 2020, the COVID-19 pandemic and social distancing measures generated a surge in e-commerce sales. Physical retailers, both large and small, scrambled to protect their revenue streams by investing in the necessary infrastructure to shift some of their business models online. Meanwhile, existing e-tailers experienced surges in demand, mostly due to high demand for essential goods. As a result, e-commerce sales increased as a share of total retail sales to a higher level than was previously anticipated. Overall, e-commerce sales increased by 39.9% during 2020, improving on its relative outperformance of total retail sales in the last decade. Furthermore, though year-over-year growth e-commerce sales slowed in 2021, lingering pandemic-related effects still enabled e-commerce sales to hold the same share of total retail sales in 2021 as in 2020, demonstrating their relative strength to the sector at large.

As the economy distanced itself from the lows of the pandemic and supply chains caught up, e-commerce sales decelerated further in 2022, though remain elevated above pre-pandemic levels as share of total retail sales while the overall structural shift from brick-and-mortar to online sales continued to be unabated. In 2023, e-commerce sales increased 5.2% while growth continued into 2024 due to resilient consumer spending despite prolonged periods of high interest rates. Despite rates declining into 2025, growth in e-commerce sales is likely to level off. Overall, e-commerce sales have risen at an annualized rate of 4.7% over the five years to 2025.