Commentary

Online Retail Eclipses Brick & Mortar By 6 to 1

According to the Internet Retailer Top 1000, from DigitalCommerce360, by Stefany Zaroban, online retail sales to consumers in the U.S. reached nearly $400 billion in 2016 by the U.S. Commerce Department’s measure, a 15.6% jump compared with 2015. That’s the biggest jump in three years and far eclipses the growth in retail sales in physical stores, which reached only 2.6% last year.

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2016 was one for the record books in e-commerce, as shoppers shifted more of their retail spending to the web, says the report.

Ecommerce now comprises 11.7% of total retail sales when factoring out the sale of items not normally purchased online, such as fuel, automobiles and sales in restaurants. In only a decade the web has more than doubled its share of retail sales from 5.1% of total retail sales ten years ago.

The leaders in online retail, ranked in the 2017 edition of the Internet Retailer Top 1000, are driving the bulk of those sales. Top 1000 retailers collectively sold $341.75 billion online to U.S. consumers last year, or 86.5% of total U.S. e-commerce sales.

E-Commerce Vs. Total Retail Sales  ($Billions; 2007-2016)

Year

Total Retail Sales

Ecommerce Sales

Ecommerce Penetration

2007

2,671 $Billion

137 $Billion

5.1%

2010

2,670

171

6.4

2013

3,000

261

7.9

2016

3,375

395

11.7

Source: DigitalCommerce, April 2017

Increasingly, says the report, the e-commerce picture is a lopsided one, as Amazon grows its market share at a breakneck pace. Meanwhile, the operators of chains of retail stores, after two years of above-market online growth in 2013 and 2014, have struggled to grow web sales in 2015 and 2016.

The Top 1000 has been a great representation of the online retail market as a whole, since collectively they represent nearly 87% of total U.S. e-commerce sales. And 2016 was a year of big highs and big lows. The number of retailers added to the ranks this year, 81 versus 53 last year, and 78 the year before, and the same number that dropped off, speaks to the volatility of the market.

The retailers that took their place in the Top 1000 ranks are a varied group. The largest portion of the 81 newcomers are fast-growing startups like women’s apparel e-retailer Stitch Fix, or lingerie merchant Adore Me that have been in business for only a few years. The 16 e-retailers on that list founded in 2013 or later, for example, grew collectively 183.0% online last year. The 40 newcomers that launched in 2011 or later grew 52.4%.

Finally, says the report, the just-released Internet Retailer Top 1000 reveals that while U.S. e-commerce is growing at a rapid clip, individual retailers’ results vary a lot. The chains are struggling online and offline more so than ever, and everyone not named Amazon is working hard to stand out from the pack.

For more information from the analysis, please visit here.

 

 

3 comments about "Online Retail Eclipses Brick & Mortar By 6 to 1".
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  1. Mike Anderson from Cox Media Group, April 25, 2017 at 8:47 a.m.

    Without the word "growth" included, this headline is extremely misleading. 

  2. Randy Novak from NSA Media replied, April 25, 2017 at 9:49 a.m.

    you beat me to it... this is incredibly misleading

  3. Paula Lynn from Who Else Unlimited, April 25, 2017 at 11:04 a.m.

    Just bought something on line that I usually buy at a store. This is pretty typical. It was make-up that I was going to buy anyway. On line I received 12 points per dollar on a special plus plenty of samples. The company enticement ensured that I didn't go to the store where I could trade in a color in case I ordered wrong. Take the same formula to other products.

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