Consumers spent $791.70 billion online with U.S. merchants in 2020, up an incredible 32.4% year over year, according to U.S. Department of Commerce figures. That’s the highest annual U.S. ecommerce growth in at least two decades. It’s also more than double the 15.1% jump in 2019.
Online’s share of total retail sales has steadily been on the rise—with ecommerce penetration hitting 19.6% in 2020, Digital Commerce 360 estimates. That’s up from 15.8% in 2019 and 14.3% in 2018. The nearly four-percentage point gain in ecommerce penetration is by far the biggest year-over-year jump for U.S. retail sales ever recorded. No other year has even reached a two percentage-point gain in digital penetration.
COVID-19-related boosts in online shopping resulted in an additional $105.47 billion in ecommerce revenue in 2020, Digital Commerce 360 estimates. If it weren’t for the bump in online sales from the pandemic, the $791.70 billion in ecommerce sales wouldn’t have been reached until 2022.
Digital Commerce 360 updated year-end ecommerce sales figures for 2020 in February 2021 after publishing projections earlier in the year.
$4.04 trillion total in US retail sales
Total retail sales increased 6.9% to $4.04 trillion from $3.78 trillion the year before, according to Digital Commerce 360’s analysis of Commerce Department figures. This is the highest growth since 1999. Digital Commerce 360 studies non-seasonally adjusted Commerce Department data and excludes sales of items not normally purchased online, such as spending at restaurants, gas stations and auto dealers.
The remarkable jump in total retail sales may come as a surprise considering the coronavirus pandemic’s negative impact on in-store shopping. However, the majority of growth in retail came from digital sales. Ecommerce accounted for nearly three-quarters—74.6%—of all gains in retail in 2020, and that’s the highest share of overall growth the online sector has ever represented. It was also nearly 11 percentage points higher than the 2008 share, which came in second place, and substantially higher than online’s 54.0% share of spending gains in 2019. Offline sales—which include stores, catalogs and call centers—grew 2.1% in 2020, which was the same rate as the pandemic-free prior year.
Amazon maintains grip on share of ecommerce but other top online retailers grow rapidly in 2020
Amazon maintains its spot as the No. 1 online retailer in North America by a large margin. The online retailer’s revenue reached $302.99 billion in 2020, up an enormous 41.4% from $214.22 billion the prior year, Digital Commerce 360 estimates. That’s more than double Amazon’s 19.1% online revenue jump during 2019. These figures include Amazon’s sales from its own products (first-party inventory) plus the commissions and fees it gets from its marketplace sellers and its Amazon Prime memberships as well as other subscription services.
Amazon represented more than a third—or 38.3%—of all ecommerce spending in 2020, increasing its market share from 35.8% the prior year. The online retailer accounted for nearly half—or 45.8%—of all U.S. online sales growth, which is up slightly from 43.8% in 2019.
But other big competitors made gains in 2020, too. Amazon for years (even decades) has alone accounted for much of the gains in U.S. online retail. In 2020, however, it’s clear that the pandemic pushed many more consumers online—and they didn’t all shop on Amazon. At least some shopped on other large online retail sites such as Walmart Inc., Best Buy Co. Inc., Target Corp. and Kroger Co.—all top 20 retailers in last year’s rankings—on track to grow online sales more than 60% in fiscal 2020, according to Digital Commerce 360 preliminary estimates.
Who were the top 0nline retailers in 2020?
Each spring, Digital Commerce 360 releases a ranking of the Top 1000 largest online retailers in North America based on the previous year’s web sales. Here are the top 10 online retailers based on early estimates of 2020 ecommerce revenue for each retailer. Many of these companies don’t report year-end numbers until February through May, so these are based on Digital Commerce 360’s early projections.
There are some significant shifts from last year. For the first time, Walmart will be the No. 2 online retailer in North America, surpassing Apple Inc. Also for the first time, Target Corp. will crack the top 10. Best Buy will jump five spots to No. 5 from No. 10. Since these are all such large retailers, each ranking move within the upper echelon is significant.
Fareeha Ali and Jessica Young contributed to this report.
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For more analysis and data on the U.S. ecommerce market, check out Digital Commerce 360’s latest report on the topic. The U.S. Ecommerce Market Report provides an analysis of COVID-19’s impact on ecommerce, growth by merchandise category, a preliminary ranking of the Top 250 online retailers in North America and more. Learn more about the report and purchase options here.
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