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US online sales grew year over year in Q1 2024, but they fell short of Q4 2023 holiday sales successes.

U.S. ecommerce penetration hit an all-time first-quarter high, accounting for 22.2% of total sales in Q1 2024 versus the previous high of 21.2% in 2023, according to Digital Commerce 360 analysis of U.S. Department of Commerce data. The department’s ecommerce data goes back to the year 2000.


That’s also the third-highest quarterly penetration since the department started tracking ecommerce sales. The highest to date was last quarter — Q4 2023 at 23.4%. Before that, the highest ecommerce penetration in a quarter was 22.6% in Q4 2020, the first year of the COVID-19 pandemic.

U.S. ecommerce sales in Q1 2024 reached about $268.12 billion. That’s up 8.5% over Q1 2023, which reached approximately $247.18 billion.

“Since Q1 2020, this is the fastest Q1 growth we’ve seen for ecommerce, and ecommerce growth accounted for a huge share of total retail growth for the period (52.8%),” said James Risley, research data manager and senior analyst at Digital Commerce 360. “That means price-conscious shoppers are using ecommerce to find the best offers and shifting buying to online amid inflationary worries.”


Breaking down Q1 2024 ecommerce and total sales

At the same time, total retail sales in Q1 2024 reached an estimated $1.820 trillion, according to Commerce Department data. Excluding spending in segments that don’t typically sell online, that comes out to $1.205 trillion, according to Digital Commerce 360 analysis.

Although ecommerce sales declined in Q1 2024 compared to Q4 2023, Risley said that’s the norm. They fell 17% quarter over quarter, and total retail sales dropped 12.7% in the same period.

“Q1 sales are almost always lower than the Q4 of the previous year because of holiday sales,” he said.


Year over year, though, Q1 sales growth was an inverted image of the quarter-over-quarter decline. Whereas ecommerce sales fell at a faster rate than total sales from Q4 2023 to Q1 2024, they grew at a faster rate than total sales in Q1 2024 compared to Q1 2023.

Ecommerce sales grew year over year at more than twice the rate of total sales in Q1 2024 — 8.5% and 3.4%, respectively.


How is ecommerce penetration calculated? 

Including all retail and food-service sales, U.S. ecommerce accounted for 15.9% of total sales in Q1 2024, according to the Commerce Department. Unadjusted figures show U.S. ecommerce sales represented 15.6% of total sales, the Commerce Department said. It estimates total U.S. ecommerce sales in Q1 2024 reached $268.1 billion.

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
  • Fuel dealers

U.S. ecommerce penetration reflects the share of dollars consumers could potentially spend online.

The Commerce Department defines ecommerce sales as the sales of goods and services where an order is placed by the buyer or price and terms of sales are negotiated over:

  • Internet
  • Extranet
  • Electronic Data Interchange (EDI) network
  • Electronic mail
  • Other online system

Payment may or may not be made online. The Commerce Department publishes estimates it adjusts for seasonal variation and holiday and trading-day differences, but not for price changes.

Percentage changes may not align exactly with dollar figures due to rounding. Here’s last quarter’s update.

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