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How will US E-commerce Sales Develop in 2020, Have You Seized the Online Business Opportunities?

August 17 2020 04:11
Lynn
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Offline retail is the largest sales market in the United States, and the e-commerce market is the main growth driver for U.S. retailers. In 2019, the U.S. e-commerce market reached US$602 billion, accounting for about 11% of total retail sales. While entering offline retail, we are optimistic about the growth of e-commerce, especially since the pandemic has fully disrupted the United States, which has accelerated the growth of U.S. e-commerce in the retail industry.


Market research agency eMarketer released the latest forecast, which shows that due to the COVID-19 epidemic, forcing more people to shop online, U.S. e-commerce sales are expected to jump by 18% in 2020. However, the surge in online orders does not offset the losses caused by the overall decline in the U.S. retail industry.


In 2020, total retail sales will fall by 10.5% to US$4.897 trillion, the highest level since 2016. These estimates assume that widespread isolation measures (which have gradually eased in May) will continue to relax and economic activity will slowly recover in the third quarter. However, consumer spending this year may still be suppressed. Total retail sales will not return to 2019 levels until 2022 and estimates for the entire forecast period will be lower than previous forecasts.


Cindy Liu, a senior forecast analyst at eMarketer, a world-renowned market research institution, said this was the worst consumer spending freeze in the United States in decades. In just a few weeks, with the release of social isolation measures in the United States, retail sales in March fell sharply. With sales in the second quarter reaching its lowest point this year, it will be several years before consumer activity returns to normal levels.

 

The eMarketer's analysis report did not discuss in depth why the overall retail sales will continue to decline even if the store restarts, but it is obvious that this must include the related effects of the economic recession caused by COVID-19-such as unemployment and job crisis, These two factors will wipe out consumers' desire to buy. In addition, many consumers dare not go to physical consumption, but only order essential necessities online. Many consumers still work from home, and sales of clothing and accessories have been hit hard.


For example, clothing and accessories are usually the second largest category of e-commerce products, but as consumers shift their consumption centers from disposable non-essential items, the sales growth rate for this category of products is only 8.6 %. At the same time, other e-commerce categories including food and beverage (F&B), and health/beauty/personal care categories will also see substantial growth, with the former increasing by 58.5% and the latter by 32.4%.

Physical Sales

The proportion of physical sales in overall retail sales will continue to decline. By 2020, physical retail sales will decline by 14.0% to US$4.184 trillion. It may take 5 years for offline sales to return to pre-epidemic levels.


E-commerce Sales

Although e-commerce is not strong enough to offset the losses of physical stores, it is easing the severity of the decline in the retail industry. E-commerce sales will increase by 18.0% this year, reaching 709.78 billion US dollars, accounting for 14.5% of total US retail sales in 2020.

 

Andrew Lipsman, a principal analyst at eMarketer, said: "Everything we have seen about e-commerce is unprecedented, and its growth rate is expected to exceed any growth since the Great Recession. Certain e-commerce activities, such as online shopping and in-store pickup In just three or four months, it will emerge permanently in the next three or four years."


The fastest-growing categories of e-commerce will be food and beverages, accounting for 58.5%, and health/personal care/beauty, accounting for 32.4%, as U.S. consumers begin to order household necessities online. Clothing and accessories are the second-largest e-commerce category in overall sales. As consumers shift their spending from discretionary and non-essential categories, they only increased by 8.6%.

 

In its 2020 retail industry future research report, eMarketer pointed out the top ten trends of the US retail industry:

• DTC brand will become mainstream.

• "Frictional" business will accelerate traditional retail transactions.

• The number of brands without a brand foundation will start to surge.

• Social commerce will develop rapidly.

• Video and voice technologies that support shopping will continue to evolve.

• The competition for a faster delivery market will accelerate the development of e-commerce.

• The rise of “retail as a service” in e-commerce and physical stores.

• Subscription business and services to build customer loyalty will grow.

• Second-hand goods e-commerce market will rise.

• Under severe economic conditions, online installment plans will become increasingly popular.


Let us wait and see how the U.S. will change the world of online sales in the next few years. As online shopping becomes the mainstream of the market, unlimited business opportunities also emerge from it, and grasping opportunities is the key to being able to obtain a surge in sales.