Us E-commerce Sales to Jump 18% This Year

Online shopping

US e-Commerce retail sales will jump by 18% this year due to the COVID-19 impact, according to an eMarketer forecast report.

This means that the retail sector might well take a few years to recover from this downturn. In 2020, total retail sales will drop 10.5% to $4.894 trillion, a level not seen since 2016, says the report.

Even though the E-commerce sector has seen a sharp uptick of 18% to reach $709.78 billion this year, representing 14.5% of total US retail sales, it is still not enough to soften the blow suffered by the overall retail sector, the report noted.

Even with the economy slowly opening up, consumer spending might still remain cautious. “Total retail sales won’t rebound to 2019 levels until 2022, and estimates throughout the forecast period will be lower than previously predicted,” adds the report.

The top E-commerce categories are food and beverage at 58.5% and health/personal care/beauty at 32.4%. These aren’t surprising given that Americans are mostly ordering essentials via online platforms. The dampener is that the usually popular apparel and accessories category will only grow by 8.6% as consumers are tightening their purse strings and being overly cautious about spending money on nonessential items, given the uncertainty of jobs across the country.

While E-commerce behemoth Amazon will still retain the top spot, Walmart has overtaken eBay as the no.2 E-commerce retailer in the country. Amazon’s Prime membership is a key reason for its continued dominance in the online shopping sector.

But the biggest mover in the sector has been the Bentonville-based Walmart. The company recently announced a stellar Q1 result where its comparable-store sales, a key retail metric, increased by 10%, has also introduced a two-hour home delivery service in some markets. Additionally, Walmart’s big punt on E-commerce is finally paying off, with online sales in the US jumping by 74% in Q1.

“Everything we’re seeing with E-commerce is unprecedented, with growth rates expected to surpass anything we’ve seen since the Great Recession,” said eMarketer principal analyst at Insider Intelligence, Andrew Lipsman. “Certain E-commerce behaviors like online grocery shopping and click-and-collect have permanently catapulted three or four years into the future in just three or four months.”

Walmart’s multi-pronged strategy, combining its large physical footprint, product availability, and online presence, makes the company a favorite in the E-grocery sector.

“The data shows that 48% of all online shoppers used Walmart for online grocery, vs. 36% at Amazon and 24% at Kroger. While those shoppers are not necessarily exclusive to the brands they use online, 82% of Walmart’s online shoppers are using the offering at least once a month, Kantar noted,” says a Winsight Grocery Business Report, which has quoted a Shopperscape survey data from Kantar Retail.

Other retailers like Target and CVS are also seeing increasing traction on their paid memberships.

Logistics is playing a key role in this evolving scenario and companies are leveraging logistics technology to enable better route optimization for their delivery riders. Technology is also helping companies do better network optimization and adopt smarter dispatch practices like the hub and spoke model. Smarter logistics ensures better customer satisfaction.

Locus offers smart logistics solutions to enterprises in the e-commerce and retail supply chain to improve last-mile deliveries with greater cost-efficiency. Get in touch with us for a free demo.

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