WHAT IS THE SHARE OF E-COMMERCE IN OVERALL RETAIL SALES?

Though most agree that e-commerce is driving rapid transformation in the retail sector, there is less consensus on what percentage of retail sales occur online. Depending on sources and methodology, the share of e-commerce can vary anywhere from 7% to more than 26%. Below is an overview of core definitions and key e-commerce statistics on sales and market share.

E-commerce sales 

Figure 1: Total E-Commerce Sales and Growth Rates

_{Source: U.S. Census Bureau, eMarketer, 2018.}

E-commerce sales totaled $453.5 billion in 2017 and have been growing at an average of 15% annually since 2010. The main source for national retail e-commerce figures is the U.S. Census Bureau, which collects the data by asking retailers to report the volume of sales made online. 

What is included in the Census Bureau’s e-commerce sales figures?

E-commerce is defined as sales of goods and services through digital channels (internet, mobile device, etc.).
E-commerce sales include internet sales of pure-play e-tailers (retailers that operate solely online) and the online sales of brick-and-mortar brands (i.e., a purchase made through a physical store brand’s website).
Not included in these e-commerce sales is revenue from online travel services, financial brokers and ticket sales agencies.

Measurement challenges

One of the major challenges to measuring e-commerce is that many retailers count online and in-store sales differently. If an order is placed or a good is reserved online and is picked up or paid for in-store, some retailers consider that an e-commerce sale while others classify it as a physical store sale. The same goes for online orders made by a customer while in a store. Because the industry has not set a standard of measurement for what defines an online vs. in-store sale, it is difficult to obtain a fully accurate picture of the distinction between digital and physical channel sales.

E-Commerce as a share of retail sales

The most common method for measuring e-commerce share is by comparing total e-commerce sales (Figure 1) to total retail sales, which includes sales across all categories except restaurants and bars. Using this method, the e-commerce share of total retail sales was 8.9% in 2017 (Figure 2).

However, e-commerce share varies depending on what retail categories are included or excluded in the retail sales figure. For example, if restaurant sales are included in overall retail sales, the 2017 e-commerce share drops slightly to 7.9%. On the other hand, if we isolate GAFO sales (generally considered typical mall category sales), that figure jumps to 26.2%. GAFO includes sales of furniture & home furnishings, electronics & appliances, clothing & accessories, sporting goods, hobby, book & music stores, general merchandise and office supplies, stationery & gift stores.

Figure 2: E-Commerce as a Share of Total Sales

_{Source: U.S. Census Bureau, 2018.}

Outside of the official government statistics, third-party sources may issue e-commerce sales and share estimates based on other methodologies, such as qualitative consumer surveys. When comparing different e-commerce sales and share figures, it’s critical to understand exactly what is and isn’t included in both the e-commerce and overall retail sales data to obtain the most relevant measurement of e-commerce for your business.