Consumers spent $871.03 billion online with U.S. merchants in 2021, up 14.2% year over year from $762.68 billion the prior year, according to early Digital Commerce 360 estimates. While that’s less than half of the record-breaking growth retailers experienced in a pandemic-fueled 2020, it’s noteworthy that the industry maintained gains—and even grew—compared with the earlier giant surge in ecommerce.
2021’s estimated 14.2% jump in digital revenue pales in comparison to the 31.8% spike in 2020, which currently is still the highest year-over-year increase since the U.S. Department of Commerce began recording ecommerce data two decades ago. But the significant slowdown meant growth normalized to pre-COVID-19 levels. In fact, the median online sales growth for the five years leading up to the pandemic was 14.2%, and 2019’s uptick was 14.3%. And when Digital Commerce 360’s prediction for 2021 ecommerce is compared with 2019 Commerce Department figures, digital spending soared by 50.6%.
The Commerce Department releases ecommerce data each quarter, but numbers for the holiday period will not be published until Feb. 18. Instead, to get a preliminary look at the U.S. online retail landscape for 2021, Digital Commerce 360 made Q4 estimates based on a variety of indicators: year-to-date financial performance of public companies; client data from technology companies with insight into online transactions and retail shipment volume; an analysis of site traffic for 2,000 merchants; interviews and surveys with online retailers of all types and sizes; and government or trade group data, such as current and historical gross domestic product figures, consumer confidence indices and Commerce Department retail figures.
Q1 2021 was the fourth consecutive quarter with 30%-plus ecommerce growth at 39.1%, according to Commerce Department data. But that increase was still elevated because it compared to the last largely pre-pandemic quarter in 2020. Since then, growth slowed to single digits—9.2% in Q2 and 6.8% in Q3—resulting in a 16.4% jump in online sales through the first nine months of the year, according to Commerce Department data.
Digital Commerce 360 estimates ecommerce in Q4 2021 rose 9.4% year over year. Overall online holiday sales in the U.S. for the November-December period grew a more muted 10.0% in 2021, according to Digital Commerce 360. And an Adobe Analytics analysis puts October ecommerce growth at 8%, which tempered the quarter’s performance. Adobe’s analysis is based on more than 1 trillion visits to more than 4,500 U.S. retail sites and covers 100 million SKUs in 18 product categories. The firm says it measures transactions from 80 of the top 100 online retailers ranked in the Digital Commerce 360 Top 1000.
Online’s share of total retail sales stabilizes
Despite the deceleration of online sales growth since the first year of the pandemic and the recovery of in-store shopping, digital penetration remained on par with 2020 since both ecommerce and offline spending grew at roughly the same rate.
Online’s share of total retail sales has steadily been on the rise—with ecommerce penetration hitting 19.2% in 2021, Digital Commerce 360 estimates. That’s essentially flat when compared with 2020—up just 0.03 percentage points from 19.1% the year before.
Before the pandemic, no year had ever even increased digital penetration by even two percentage-points from the prior 12-month period. But COVID-19 turbocharged ecommerce adoption, and online’s share of total retail sales jumped 3.6 percentage points in 2020, to 19.1% from 15.5% in 2019.
US total retail sales reach $4.55 trillion in 2021
After registering a near all-time high overall growth rate in 2020, total retail sales continued the momentum into 2021. Spending through all channels reached $4.55 trillion last year, up 14.0% from $3.99 trillion in 2020, according to a Digital Commerce 360 analysis of Commerce Department overall retail data, which is published monthly and already released through December 2021. That record year-over-year climb was nearly double the 7.2% growth in 2020 and still far higher than the previous highest growth of 7.3% in 1999.
With a large swath of the country vaccinated in 2021, shoppers headed back to stores. Offline sales grew a record 14.0% last year, Digital Commerce 360 estimates—more than five times the 2.6% uptick in 2020 and nearly 2.5 times higher than the second-place finisher at 5.7% in 2004. The huge spike in store sales means that ecommerce accounted for far less of the overall gains in retail spending—less than a quarter, or 19.4%, in 2021 vs. more than two-thirds, or 69.1%, the prior year.
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.
Amazon accounts for 42% of US ecommerce
Like many other retailers and the overall market, revenue growth slowed for Amazon.com Inc., No. 1 in the Top 1000. But the web giant still grew its share of the U.S. ecommerce market in 2021. The total value of goods Amazon and its third-party marketplace sellers sold to U.S. consumers, often referred to as gross merchandise value or GMV, increased 17.3% to $364.38 billion last year from $310.57 billion in 2020, according to Digital Commerce 360 estimates. Meanwhile, online sales in the U.S. grew an estimated 14.2%.
As a result of that above-market growth, Amazon and its third-party merchants represented 41.8% of digital spending in the U.S. in 2021 vs. 40.7% in 2020. Additionally, the web giant accounted for nearly half—49.7%—of all gains in U.S. ecommerce in 2021, according to Digital Commerce 360.
Percentage changes may not align exactly with dollar figures due to rounding.
