U.S. E-Commerce Growth Rate and Market Evolution (2001-2025)
Online retail is actually a relatively new form of doing business and the volume of online shopping done by Americans has skyrocketed in recent years. The first true e-commerce company goes back to 1969, named CompuServe, which was the oldest of the early internet service providers. By the summer of 1995, Jeff Bezos launched a service for buying books over the internet, and thus, Amazon was born. Today, online shopping is as simple as a few taps on a smartphone, and it represents between 14.5% and 15.7% of all retail sales.
U.S. E-Commerce Statistics and Growth Trends
E-commerce retail had been increasing steadily prior to 2020. Despite a dip in sales during the Great Recession, e-commerce activity increased each year at a relatively steady pace. In 2021, e-commerce retail sales hit about $960 billion in the U.S. By 2023, e-commerce sales in the U.S. were on target to exceed $1.1 trillion. However, at 7%, 2023 was the slowest year of growth since the 2009 recession. Last reported quarter 2025 Q2 it was 5.3%, down by -21% year-over-year from 6.7%.
Current Market Data Summary
- Daily Spending: American shoppers spend an estimated $2.85 billion online collectively each day.
- E-commerce Share of Retail: For the Last Twelve Months (LTM), e-commerce has accounted for 15.7% of retail revenue, more than at any other time in US retail history.
- Pre-Pandemic Trend: Today’s e-commerce is 14% above the trendline compared to a theoretical market where the pandemic didn’t happen.
- 2023 Revenue: This year, e-commerce grew 7% to hit $1.1 trillion.
Impact of the COVID-19 Pandemic
E-commerce saw a sharp rise after the onset of the pandemic—followed by a drop. The onset of the COVID-19 pandemic caused Americans to desert public spaces—an act that supercharged online shopping in 2020. While some predicted that the trend toward online shopping was here to stay, online sales began to dip by fall 2020, showing that the trend wasn't as sticky as they may have believed. Nevertheless, since Q3/2022, e-commerce revenue has outgrown that of physical stores. This difference in growth has pushed the e-commerce share of all retail revenue to 15.2%, almost as high as during the first peak of the pandemic lockdowns in Q2/2020 (15.5%).
Performance of Major Retail Giants
Overall retail growth is coming through e-commerce. In Q2/2024, e-commerce was responsible for 52% of all growth in the retail market. Store revenues grew by 1.9%, whereas e-commerce revenues were up by 6.6% in the year's second quarter.
Walmart and Target
The American retail giant Walmart reported robust growth for Q2/2024. The e-commerce segment drove the growth, representing almost 45% of all growth by the retail giant. The growth of the e-commerce business was led by store-fulfilled orders (pickup and delivery). Similarly, Target is returning to growth with digital growth. The 2.6% growth, driven by a robust 7.5% comparable growth in the online channel, particularly through same-day services, underscores the significant role of e-commerce in Target's resurgence. According to Target CEO Brian Cornell, same-day services account for more than 2/3 of digital sales.
Amazon’s Market Share
Amazon will once again hold first place by a wide margin in 2023, with 37.6% of US retail ecommerce sales compared with the 6.4% of No. 2 Walmart Inc. While Amazon has lost share since last year, that will change in 2024, when its share is expected to increase to 38.0%.
Growth Opportunities
E-commerce is the most significant growth opportunity for US retailers in the coming years. For a decade, 14-15% growth was the norm. This year, with 7% growth, was likely the bottom, and e-commerce will accelerate from here to the expected 9-10% growth over the upcoming years.
