U.S. ecommerce spending in Q2 marked its fourth straight quarter of single-digit growth following the 45%-50% jumps during the first year of the pandemic, according to a Digital Commerce 360 analysis of U.S. Department of Commerce figures released Friday. But the year-over-year increase in online sales also outpaced that of stores for the first time since early 2021.
How fast is ecommerce growing in the US?
Digital revenue hit $252.14 billion in the second quarter, up a modest 7.3% from $234.89 billion for the same period the prior year, according to Commerce Department data. That was less than half of the 15.4% U.S. ecommerce growth registered in Q2 2021 and nowhere near the 53.4% surge during the lockdowns and store closures in Q2 2020.
But it’s still notable that retailers could grow online revenue during the three months, given the massive — and some speculated, unsustainable — bump in web sales they received as COVID-19 raged and Americans shopped from home. The U.S. ecommerce market has managed to maintain and even build upon those early pandemic shifts in consumer buying behavior.
Additionally, Q2 2022’s performance was more muted since Amazon.com Inc., No. 1 in the 2022 Digital Commerce 360 Top 1000 rankings, moved its popular Prime Day sale from June to July this year. That meant the big spike in online retail spending for Amazon and competitors around the two-day event shifted to Q3, and U.S. ecommerce grew 7.3% year over year last quarter despite the loss of Prime Day dollars.
What share of US sales is ecommerce?
More than $1 in every $5 spent on retail purchases still came from online orders in the second quarter, according to Digital Commerce 360’s analysis of Commerce Department data. Online’s share of total retail sales was roughly the same in Q2 2022 as it was for the same period the prior year — 20.6% vs. 20.4%. But penetration greatly accelerated from the 14.3% digital penetration in a pre-pandemic Q2 2019. Since COVID-19 took hold in the U.S., online’s quarterly share of all retail spending has hovered in the 20%-23% range.
In the years leading up to 2020, digital’s share of total retail sales reached the mid-teens, having grown each year incrementally. That happened organically as shoppers got increasingly comfortable purchasing items online and retailers made improvements to their ecommerce operations. But the pandemic accelerated that trend in a big way. Temporary store closures and lingering consumer anxiety over being in crowded spaces during a global pandemic prompted many to shop on the web, boosting online penetration.
How is ecommerce penetration calculated?
Digital Commerce 360 studies non-seasonally adjusted Commerce Department data and excludes spending in segments that don’t typically sell online. These segments include restaurants, bars, automobile dealers, gas stations and fuel dealers. U.S. ecommerce penetration reflects the share of dollars consumers could potentially spend online.
Total retail sales growth sees big slowdown in Q2
Sales through all channels reached $1.22 trillion last quarter, up from $1.15 trillion in Q2 2021, according to Digital Commerce 360’s analysis of Commerce Department data. The 6.2% increase is a far cry from the massive 20.5% swell in total retail sales for Q2 2021, which was spurred by pent-up demand from newly vaccinated shoppers eager to return to in-store shopping. That period marked the highest growth of any quarter or year in at least the last three decades for which data is available. But again, part of the Q2 sales growth drop-off this year was due to Amazon Prime Day spending being pushed from June into July, or Q3.
Additionally, although the 6.2% jump in combined online and in-store sales was less than a third of what it was during the same three months of 2021, it was still significantly higher than the usual performance of total retail before COVID-19 hit. The typical year-over-year increase for the five years pre-pandemic was just 3.5%.
This year’s second quarter total retail sales growth was also double the 3.1% rate in Q2 2020, the height of the pandemic when lockdowns left offline sales plummeting and ecommerce exploding by more than 50.0%.
At 5.9%, sales through stores and other offline channels grew more slowly in the April-June quarter than the online segment. That hasn’t happened since Q1 2021, the last period before widespread vaccinations brought shoppers back to in-person shopping. Because of that, ecommerce’s share of total retail gains increased to 24.1% — the highest quarterly share since Q1 2021.
The retail industry registers single-digit gains in first half of 2022
Here’s how the retail industry performed through the first half of the year:
- U.S. ecommerce hit $483.46 billion, up 7.0% from $451.63 billion in the first two quarters of 2021.
- Online penetration reached 20.8%, flat vs. the same period last year.
- Offline sales increased 7.0% year over year.
- Total retail sales reached $2.32 trillion, up 7.0% from $2.17 trillion in the first half of 2021.
- Digital sales accounted for 20.9% of gains in retail spending across all channels.
Percentage changes may not align exactly with dollar figures due to rounding.
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