How Much Will eCommerce Grow in FY 2020?

It’s common knowledge that eCommerce volume has exploded in 2020. But the question is, how much? Another important question is what can we expect in the looming holiday season? And what strategic guidance can product-based SMBs take to position themselves and end the year on a high note?

Starting with overall eCommerce growth, eMarketer estimates a 32.4 percent year-over-year rise in U.S. eCommerce spending. That correlates to $794.50 billion in eCommerce spending this year, up from $600 billion last year. The firm projects that total to grow to $1.2 trillion by 2024.

To put that into perspective, after hovering around 10 percent of U.S. retail spending over the past decade, eCommerce now has a 14.4 percent share. Notably, its share of U.S. spending isn’t expected to dip back down to pre-2020 levels, growing slightly to 15 percent next year and 19.2 percent by 2024.

As for net consumer retail spending, eMarketer estimates that it will be essentially flat in 2020. The firm believes that the above eCommerce growth will mostly offset the Covid-incited decline in brick & mortar shopping.  The latter is expected to drop 3.2 percent to $4.711 trillion.

Home Stretch

That brings us to the question of holiday shopping. Much of the above 2020 full-year projections will be impacted by what happens in the home stretch… otherwise known as the holiday shopping season. There, eMarketer is likewise bullish on eCommerce spending, projecting a 35.8 percent year-over-year jump.

Specifically, it projects that U.S. consumers will spend $190.47 billion on online shopping this holiday season, up $50 billion from the same period last year. Brick & mortar sales will decline 4.7 percent to $823 billion but, like the above full-year figures, eMarketer believes that eCommerce growth will offset those losses.

This will include record-breaking days in the “cyber-five” period that stretches from Thankgsigivng day to Cyber Monday. For example, Black Friday is projected to see its first-ever $10 billion spending day, growing 39.4 percent year-over-year. Cyber Monday is projected to grow 38.3 percent year over year to $12.89 billion.

Higher Stakes

eMarketer isn’t alone in its bullish take on eCommerce in the coming holiday period. Adobe has released its projections which estimate that online holiday shopping will grow 33 percent year-over-year to $189 billion. These projections are aligned with eMarketer’s, with only a few percentage-point differences in growth.

So what’s the takeaway? The good news is that after hand-wringing over recessionary dynamics, U.S. consumer spending will be essentially flat. The bad news for brick & mortar retailers is that those dollars have massively shifted online. That means businesses that haven’t repositioned for that shift will continue to suffer.

That’s not a new insight, but it will be amplified by the higher stakes of the holiday season. SMB SaaS players that can help businesses make that transition will be primed for the coming months (and years). If eMarketer is right, eCommerce’s current spending levels will sustain and represent a permanent “next normal” shift.

Data Scout is Localogy’s series that curates and draws meaning from third-party data. Running semi-weekly, it adds an analytical layer to the industry data that we encounter in daily knowledge building. For Localogy original data, see the separate Modern Commerce Monitor™️ series.

Stay ahead of the curve and get the latest on Local straight to your inbox.

By submitting this form, you agree to receive communications from Localogy. You can unsubscribe at any time.

Related Resources

Has Grocery Shopping Transformed Permanently?

Given that it’s Thanksgiving week here in the U.S., we decided to revisit our eCommerce analysis but with a grocery spin. How has grocery fared in the past several months? And do shifting consumer patterns represent permanent new habits?