US E-Commerce Sales Surpass $1 Trillion

E-commerce spending in the U.S. exceeded $1 trillion over the past twelve months. A milestone that pre-pandemic trends predicted would only occur in 2024.

According to the Department of Commerce, e-commerce sales over the past twelve months reached $1.02 trillion. The market has nearly doubled in size in three years.

But for the first time since 2009, e-commerce growth will likely be down to single digits in 2022. The trailing twelve months are up only 9% from the period before, and Q4 will probably grow slower. Admittedly, that’s compared to the historic growth in 2020 and 2021.

U.S. E-Commerce Trailing Twelve Months (TTM) Sales

E-commerce spending is 25% bigger than pre-pandemic forecasts would have suggested. If the pandemic didn’t happen and e-commerce grew at the rate it was growing for years before, 14-15%, the annualized run rate would have been $815 billion today. A massive $200 billion smaller than the current $1 trillion run rate.

Total retail spending has increased even faster than online retail, however. It reached a $7 trillion run rate in Q3. Thus, despite e-commerce continuing to trend above the trendline, e-commerce penetration has been falling back to the pre-pandemic trend. In the latest quarter, 14.1% of consumer spending happened online. Excluding retail categories that don’t typically compete with e-commerce - restaurants, car dealers, and gas stations - e-commerce represented 21% of retail.

U.S. E-Commerce vs. Trendline

Confusingly, e-commerce has both returned and not returned to prior trends. E-commerce spending is bigger than the trendline in dollars but roughly in line with the pre-pandemic penetration percent trendline. That is, e-commerce spending is $1 trillion rather than $815 billion, but that’s only 14.1% of retail, which is nearly the same as the 13.6% prediction.

E-commerce was up 10.8% in the third quarter, back to double digits for the first time since the second quarter of 2021. E-commerce is again accelerating, but now on a much larger base of total e-commerce.

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Juozas Kaziuk─Śnas

Founder of Marketplace Pulse, Joe wears multiple hats in the management of Marketplace Pulse, including writing most of the articles. Based in New York City. Advisor to other startups and entrepreneurs. Occasional speaker at conferences.

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