Consumers spent $145.74 billion online with U.S. retailers in the third quarter, up 17.3% from $124.21 billion for the same period in 2018, according to retail data released Tuesday by the U.S. Department of Commerce. This is significantly higher than the year-over-year ecommerce growth registered in the first six months of the year, when web sales in Q1 increased 11.6% and in Q2 jumped 13.6%. Last quarter’s rate also marks the highest quarterly growth since Q4 2011, when online revenue spiked 18.6% over the same period the previous year.

While a banner year for Amazon.com Inc.’s Prime Day sale in July undoubtedly contributed to the strong showing, some analysts are pointing to the retailer’s investments in shortening delivery times from 2- to 1-day shipping and Walmart Inc. expanding its online grocery service as the major reasons why ecommerce flourished last quarter.

Overall, retail performed well in Q3, Commerce Department figures indicate. Total retail sales through all channels grew a healthy 4.8% year-over-year, reaching $938.57 billion versus $895.54 billion in Q3 last year. The nearly 5% growth represents the largest uptick in Q3 total sales since 2014, when retail sales increased 4.9%. These figures are based on a Digital Commerce 360 (formerly Internet Retailer) analysis of non-seasonally adjusted Commerce Department data and exclude sales in segments that don’t typically sell items online such as restaurants, bars, automobile dealers, gas stations and fuel dealers.

Half of all gains in retail spend for the quarter came from revenue generated online. Ecommerce penetration of retail sales hit 15.5% in the third quarter, up from 14.9% in Q2 and 13.9% in Q3 of last year. Online’s share of total retail sales has nearly tripled in the last decade as shoppers get increasingly comfortable buying online.

When analyzing the first nine months of 2019, web sales growth drops to 14.2%, the slowest year-to-date rate since 2013 with 13.8%. For the 9-month period, online revenue reached $414.40 billion, up from $362.75 billion for the first three quarters of 2018. Digital Commerce 360 previously projected U.S. ecommerce will grow at a slightly lower 14.0% in 2019, and nine-month growth can be a good signal of where the market is headed. Total retail through Q3 hit $2.73 trillion, up 3.7% from $2.63 trillion last year.

With total retail sales growing more slowly over the nine-month period than in the third quarter alone, online’s share of overall retail gains increased to 53.1% for the first three quarters. And 15.2% of all retail spend occurred online from January through September.

Amazon and Walmart boosted U.S. ecommerce in Q3

The strong retail results in the third quarter news provides support for economists’ continually upbeat holiday projections despite some indicators pointing to a gradual slowdown in the U.S. economy and declining consumer confidence heading into the all-important holiday season.

“I think this [Q3] data is consistent with overall solid consumer spending in the U.S.,” says Colin Sebastian, managing director of equity research at Robert W. Baird & Co. “It’s also consistent with Amazon’s reported acceleration in online store revenues, as another leading indicator.”

Brian Yarbrough, senior analyst for equity research at investment firm Edward Jones, agrees. Amazon, No. 1 in the 2019 Internet Retailer Top 1000, had been reporting a deceleration in the growth of its online sales throughout most of 2018 and into Q1. But that trend in Amazon’s online growth has turned around, going from a 9.5% year-over-year growth in Q1 to increasing by 14.3% in Q2 and ballooning by 20.6% last quarter, he notes.

The turnaround also was evident in Amazon’s growing revenue from commissions it receives from sales by sellers on the Amazon Marketplace, as well as other services Amazon provides those merchants, including fulfillment of their orders. Although the change in this segment hasn’t been as drastic as the growth in online store sales this year, that line item also has grown each quarter in 2019 after sliding for the entirety of 2018, he adds. Q1’s year-over-year growth registered 20.2%, Q2 reached 23.3% and last quarter hit 27.1%.

During Q3, Prime Day 2019, which spanned a 48-hour period from July 15-16, surpassed previous Prime Day, Black Friday and Cyber Monday promotions to become Amazon’s biggest sales events ever. Digital Commerce 360 estimates that the retailer reached $7.16 billion in global sales this summer, up 71.0% from $4.19 billion sold during the 36-hour sale in 2018. Although Amazon doesn’t disclose its revenue from Prime Day, the company reported selling more than 175 million products compared with 100 million last year, and said sales through marketplace sellers crossed $2 billion. Last year, Amazon said marketplace sales “far exceeded” $1 billion during Prime Day 2018.

If the domestic share of Amazon’s Q3 revenue the past couple of years held true during the July event, Prime Day sales in the United States hit $4.71 billion in 2019, a 73.6% increase from $2.71 billion the prior summer, according to Digital Commerce 360 estimates. If correct, that estimated $2 billion in increased web sales during those two days would account for more than 9.0% of the year-over-year online retail sales growth in Q3. But since Prime Day got its start in the United States market and only recently expanded internationally, it’s likely that the event has a bigger presence stateside and that the United States garnered an even larger share of global Prime Day sales than the conservative $4.71 billion suggests.

While Prime Day’s success was a growth driver for U.S. ecommerce last quarter, analysts cite other Amazon headlines as having an outsized impact on the overall market.

“Prime Day may have helped a little, perhaps shifting some spend from Q2 into Q3, but there are other factors,” Sebastian says.

Yarbrough attributes much of the surge in the business to the ramp-up of Amazon’s one-day shipping initiative for Prime members, which was announced in April, since the time frame aligns with upticks in sales. The initiative began gradually expanding in the spring before a full roll-out on 10,000 eligible products across the United States with no minimum purchase began in June.

Jim Okamura, partner at retail consulting firm McMillanDoolittle, also says Amazon and brands have been doubling down on their sales—both in first- and third-party channels—and that’s reflected in the Commerce Department’s retail data.

“The one-day delivery move, too,” he adds. “Enough said.”

Amazon doesn’t break out sales by major markets in its quarterly filings, but after analyzing historical data for the United States and Q3’s North American share of consolidated net sales, Digital Commerce 360 estimates that the retailer’s U.S. web sales reached $35.01 billion last quarter. That was up 25.2% over $27.96 billion for the same period in 2018. (Figures include subscription services and commissions and fulfillment fees for third-party sales.) This means Amazon accounted for nearly a quarter of all U.S. ecommerce in Q3 and is responsible for nearly a third of ecommerce growth from July through September.

Walmart’s Q3 performance also had a ripple effect in the U.S. market. According to Sebastian, there has been a concerted push for more online sales by omnichannel retailers such as Walmart (No. 3), and growth has come from non-traditional categories like food delivery. In its earnings release, the retail chain reported U.S. ecommerce grew 41.0% in Q3—the best quarter of web sales growth so far this year—and credited the momentum in online groceries.

Walmart didn’t report U.S. online sales in dollars, but the U.S. segment, which excludes Sam’s Club, reported $3.6 billion in online revenue in the third quarter of 2018. A 41.0% increase would translate to roughly $5.08 billion for the same period this year. That would mean Walmart took a 6.9% share of all retail ecommerce gains in the United States last quarter.

Walmart has been investing heavily in grocery omnichannel capabilities, and the U.S. segment ended the quarter with more than 3,000 grocery pickup locations and more than 1,400 same-day grocery delivery participants. This is a significant expansion from under 2,100 pickup and less than 600 delivery spots in Q3 2018, and up from more than 2,700 pickup and more than 1,100 delivery spots in Q2 2019. According to Yarbrough, the rollout of curbside pickup has been a key component of Walmart’s recent success.

This article was updated on Nov. 20, 2019. To read the previous article titled “Online sales grow 13.6% in Q2” by Katie Evans and Jessica Young published on Aug. 19, 2019, click here.