Measuring Acceleration: eCommerce Tops 21% of Retail Sales in 2020

We’ve been hearing, and not to mention witnessing, a massive shift from offline to online shopping during the pandemic. It’s been a whiplash-inducing experience that has helped transform the world “acceleration” into a business cliche. A report from Digital Commerce 360 (mining U.S. Dept. of Commerce data) gives us the stats on what happened with eCommerce in 2020. And they are fascinating.

For starters, retails sales overall (online and offline) jumped 6.9% to $4.04 trillion in 2020. And online sales accounted for 101% of retail gains last year. That’s the first time ever that online accounted for all of retail sales growth. Without online commerce, retail sales would have declined last year. So the pandemic didn’t suppress retail sales. It just moved them online.

Online retail sales alone grew by 44% to $861.1 billion in 2020. To put that staggering leap in perspective, that is roughly 3X the 2019 online retail growth rate.

And, of course, the 2020 leap in online’s share of total retail spend was also staggering. In 2019, online accounted for 15.8% of online retail spending. And that was a pretty mightily leap from 14.4% in 2018. Which, in turn, was a big jump from 13.2% the prior year. In 2020, online retail catapulted to 21.3% of total retail sales. In percentage point terms, eCommerce gained more than 2X from 2019 to 2020 than it did from 2017 to 2019.

eCommerce Winners in Local

We all know the pandemic has left many industries battered. We don’t need to rehash the list. But in the local and SMB tech space, the massive jump in eCommerce as a share of total retail has been a boon for many companies in the Localogy ecosystem. It stands to reason, given wave after wave of lockdowns forced small merchants long resistant to the hassles and uncertain benefits of selling online, were suddenly forced to become mini Amazons just for a shot at survival.

This transition has been brutal for many small business owners. But it has been a boon for companies that build the software that enables SMBs to trade online. We wrote about one such company yesterday. Wix, the fast-growing digital presence company, reported its earnings this week. And in addition to reporting a major jump in revenue, it showed how the economics of eCommerce is creating customers that grow revenue faster and churn at much lower rates than customers that only purchase a website.

2020 – eCommerce is Finally Real

Acceleration Across the Board

While the rapid leap in eCommerce share in 2020 is staggering, it isn’t surprising, at least as we look back at last year. We could even argue it was a little lower than it might have been, given how traumatic a disruption the pandemic presented. And not just to retail but to countless other industries.

As has been noted frequently, the pandemic accelerated trends. It did not create them. And as time passes, it feels less and less likely that there will be any reversal in these trends. This applies to resuming the old downtown high-rise office culture. Attending music festivals. Hopping on planes for a little face time with customers. You name it. It is going to take us a while to really assess the damages and the gains. And which changes are temporary or permanent. And to figure out the real winners and losers. Well, we do know for certain at least one winner: eCommerce.

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

Microsoft Enters the Website-Builder Biz

Microsoft has officially entered the website-builder competitive fray. Last week, it announced a new suite of free tools designed for SMBs to get a website up and running quickly. We break down the strategic implications.