This story was updated March 13.
Consumers spent $517.36 billion online with U.S. merchants in 2018, up 15.0% from $449.88 billion spent the year prior, according to a new Internet Retailer analysis of industry data and historical U.S. Commerce Department figures. That’s a slight slowdown from 2017, when online sales grew 15.6% year over year, according to Commerce Department figures.
Total retail sales, not including the sale of items not normally bought online like fuel, automobiles and food at restaurants, hit $3.628 trillion last year, up 3.9% year over year from $3.490 trillion, Internet Retailer’s analysis of the U.S. Commerce Department’s total retail sales figures shows.
The U.S. Department of Commerce estimates consumers spent $513.61 billion online in 2018, up 14.2% from 2017. Total retail sales increased 4.1% to $3.63 trillion, according to its figures. The Commerce Department’s release of year-end retail data was delayed until mid-March due to the federal government shutdown.
Ecommerce represented a growing share of the retail market in 2018, taking a 14.3% share of total retail sales last year, up from 12.9% in 2017 and 11.6% in 2016.
More significant is that ecommerce sales represented more than half, or 51.9%, of all retail sales growth. This is the largest share of growth for purchases made online since 2008, when ecommerce accounted for 63.8% of all sales growth.
Ecommerce had a strong start to 2018. Through the first three quarters of the year, online sales grew a strong 15.5%, which was higher than the previous three years. In 2017, sales were up 15.2% through the first nine months, and up 14.6% during the same period in 2016. But several indicators show a consumer spending slowed down in December, which may have contributed to slower-than-expected growth in the fourth quarter.
For one, the U.S. Commerce Department reported December nonstore sales grew just 3.1% compared with December 2017. Nonstore sales mainly take place online but also include other channels, such as mail and telephone orders, door-to-door sales and sales through vending machines.
Secondly, U.S. consumer confidence declined in November and December, after hitting an 18-year high in October. Consumer confidence, which is based on a survey that measures consumer sentiment on current economic conditions and prospects for the next six months, dropped to 126.6 in December from 136.4 in November and 137.9 in October, according to The Conference Board Consumer Confidence Survey. Generally speaking, when consumers believe the economy is doing well, they feel more secure and are more willing to spend.