Report: E-commerce sales will surpass $1 trillion this year

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Diving Brief:

  • Thanks in part to pandemic-induced growth, FTI Consulting forecasts online retail sales to reach $1.07 trillion in 2022, a milestone that, before the pandemic, the company predicted would occur in 2025. .
  • At the end of 2022, the share of online retail sales excluding cars and gasoline will be 22.1%, compared to 20.8% in 2021 and 15.2% in 2019.
  • The report also predicts that e-commerce sales will exceed $2 trillion by 2030 and that online sales will account for 31% of market share by the end of the decade.

Overview of the dive:

FTI Consulting predicts that online retail sales will hit the $1 trillion milestone in the third quarter of this year, doubling from the previous four years. At the start of the pandemic, shoppers avoided stores to contain the spread of Covid-19, increase ecommerce spend and creating what FTI described as “four quarters of hypergrowth.” But now buyers are more worried about high inflation and a potential recession that could upend their finances, according to the report.

“[T]he meteoric growth of online retail during COVID-19 is sure to moderate. Online sales over the past two years have been driven by necessity – home shopping due to home living and working conditions – as well as more discretionary income due to government stimulus measures, a rapid recovery in employment and an increase in savings,” JD Wichser, retail and consumer products practice leader at FTI Consulting, said in a statement. “This will modulate over time, exacerbated by recent inflationary pressures, which are expected to slow total retail spending in the second half of 2022 and quickly become the main source of stress for consumers, who do not know how long this will last. will persist. ”

Adobe made a similar prediction about e-commerce spending last year. In early 2021, the company predicted that e-commerce spending would reach $1 trillion in 2022.

However, the surge in e-commerce sales has not been entirely beneficial to retailers, and brick-and-mortar stores are expected to remain an important channel. A Forrester Report 2021 estimated that nearly three-quarters of US retail sales will still occur in physical stores in 2024. Operating as an online-only retailer also remains a challenge: A survey of international retail leaders conducted by Ipsos for Publicis Sapient and Salesforce found that 44% of online-only retailers were unprofitable, compared to 20% of brick-and-mortar retailers who said the same.