E-commerce Market Share Insights

The Census Bureau recently released detailed Q3 data about e-commerce sales for the retail trade sector. Two charts below summarize some key findings. Thoughts: •The top chart shows seasonally adjusted E-Commerce Sales as a Percentage of Total Sales for Retail Trade Excluding Motor Vehicle & Parts Dealers (NAICS 441) and Gasoline Stations (447). I exclude the two subsectors given e-commerce activity for the former doesn’t concern parcel shipping, whereas the latter sector has practically no e-commerce (plus it has volatile revenue that can skew figures). Q3 2023 saw a slight increase in the e-commerce percentage figure that places us exactly on the trendline as implied by 2018 – 2019. Thus, there is good evidence that we have seen a reversion of e-commerce purchasing behavior to the long-term trend. I recall back in early 2021 I suggested this possibility, which was met with strong skepticism at the time (the general consensus then was that COVID-19 represented a step-function jump that would then see e-commerce percentage increase at the same pace we saw before COVID-19). While I have certainly made incorrect predictions about supply chain dynamics since COVID-19, the best available data to date corroborates the trendline reversion for e-commerce activity. •The bottom chart splits e-commerce sales by nonstore retailers versus e-commerce sales by primarily brick-and-mortar retailers excluding motor vehicles and parts dealers. Here we see very different patterns. E-commerce sales for brick-and-mortar retailers are down this time from last year, whereas e-commerce sales for nonstore retailers continue to rise (note, these data aren’t adjusted for inflation). •A key implication from the bottom chart is that is looks like most e-commerce growth right in 2024 will be at nonstore retailers, as opposed to the brick-and-mortar retailers. Implication: Census Bureau data shows that the percentage of e-commerce sales has reverted to the pre-COVID trendline and appears to be following that trendline. While this does suggest some volume growth for parcel carriers in 2024, no one should expect the record levels from late 2020 and 2021 to manifest for a few more years. #ecommerce #supplychain #supplychainmanagement #shipsandshipping #logistics #freight

Despite stiff competition, Amazon is well on its way to capturing over 40% of the US eCommerce market. 📊 Key Stat: According to a February 2024 forecast, Amazon will account for 40.4% of US retail e-commerce sales, totaling $491.65 billion this year. 💡 Insights from the article 1️⃣ Amazon will make up just 6.6% of US retail sales despite its eCommerce dominance. This share is expected to grow to 7.0% in 2025 as more spending shifts to eCommerce. 2️⃣ Over the next two years, Amazon’s market share will increase in 8 out of 10 product categories. The exceptions are home improvement (due to established retailers) and auto (due to Tesla and Carvana). 3️⃣ Among major US retailers, Walmart is growing its eCommerce sales faster than Amazon, with a growth rate of 13.6% compared to Amazon’s 10.5%. Walmart's lead in digital grocery could pose an increasing threat to Amazon as the category matures.

I'm thrilled to share a recent project I collaborated on with Raj Pravin Bora at the Cornell Graduate Consulting Club (CGCC) for GrowByData . Here's a sneak peek into our fascinating findings: 🌐 The Shift in Shopping Habits: Millennials, Gen Z, and the upcoming Gen Alpha are revolutionizing online shopping. They're increasingly starting their product searches on platforms like Amazon, Walmart, and social media stores (Instagram Shop, TikTok Shop). Remember when search engines were the go-to? That’s changing fast. So, think about it—where do you start your online shopping? 🔍 Search Engines Aren't Dead: Despite the shift, search engines remain pivotal. Research shows that 42% of US consumers still use search engines to start their product searches. They're indispensable for price comparisons and finding trusted links. Do you still use search engines for your purchases? 📱 The Social Media Influence: Social media platforms like TikTok are becoming significant players in the e-commerce landscape. The rise of social commerce is undeniable, with platforms like Amazon and TikTok competing fiercely for consumer attention. However, building trust in social media shops remains a key challenge, especially with concerns over counterfeit products. Are social media shops trustworthy enough for you to make purchases? 🔒 Privacy vs. Personalization: With Google's Privacy Sandbox Initiative and the phase-out of third-party cookies by 2025, online advertising is changing. The balance between privacy and personalized ads is more crucial than ever. Are you ready for this new era of online privacy? 🤖 AI's Game-Changing Potential: Imagine ChatGPT as the next search engine, offering personalized insights and product comparisons. While this might seem futuristic, AI's potential influence on shopping trends is undeniable. 🛒 Evolving to Social Commerce: From brick-and-mortar stores to e-commerce and now to social commerce—it’s been a fascinating journey. Amazon is diving into the social commerce game with features like 'Inspire.' Did you know that 56% of US adults started their product search on Amazon in Q1 2023, down from 63% in Q1 2022 (Jungle Scout)? Is this because of social commerce? 💼 What This Means for Businesses: If you're looking to break into the e-commerce space, capturing the social media demographic is crucial with the increasing popularity of social commerce. However, don't neglect SEO—it’s here to stay, at least for the near future. With changes in the upcoming Google cookie deprecation and AI's potential, who knows what innovations the future holds? But building trust in consumers and organic growth is the way to go for the tech-savvy incoming generation. With this project, we answered many questions and ended with some food for thought. So, how do you see your own online shopping habits evolving in the next few years? #ECommerce #DigitalTrends #CornellGCC #FutureOfShopping #ConsultingProject #DigitalMarketing #SocialCommerce