US online retail sales will witness a $71 billion windfall in 2020 as a direct result of the impact of COVID-19 on shopping habits, according to the 2020 US Online Retail Forecast released recently by FTI Consulting, which said the figure will rise from $598 billion in 2019 to $748 billion in 2020—a 25 per cent increase. Its pre-pandemic 2020 forecast was $677 billion.
This year is the strongest growth year for online retail sales since 2006, when the channel was still in its infancy. The forecast projects online market share of total retail sales will increase by 350 basis points in 2020, more than double its annual market share gains in recent years, according to a release from FTI Consulting.US online retail sales will witness a $71 billion windfall in 2020 as a direct result of the impact of COVID-19 on shopping habits, according to the 2020 US Online Retail Forecast released by FTI Consulting, which said the figure will rise from $598 billion in 2019 to $748 billion in 2020-a 25 per cent increase. Its pre-pandemic forecast was $677 billion.#
Months of stay-at-home orders and the closures of non-essential businesses have altered consumer habits and the shopping landscape, with online grocery and home-related spending seeing significant increases in sales, while travel-related spending, away-from-home dining and apparel have lagged badly as most Americans continue to stay close to home.
The forecast projects online retail sales now will reach $1 trillion by 2023, a year earlier than last year’s projections. Total online market share is projected to reach 27 per cent by 2025 and 33 per cent by 2030, compared to 19.2 per cent in 2020.
While Amazon.com remains the dominant player in the online retail space, the pandemic has enabled large omni-channel retailers to boost their online sales, particularly with the use of curbside pickup, and to increase market share.
Amazon’s estimated market share of online sales likely declined slightly in the second quarter of this year despite reporting record-level retail sales, as several large retailers saw online sales double or triple in the most recent quarter, FTI Consulting said.
While many people who were forced to use the online channel for purchases due to the pandemic will continue to do so in the future, annual sales growth similar to 2020 is highly unlikely going forward. Annual online retail sales growth will decelerate to low double-digit rates over the next several years, according to the forecast.
The pandemic also will alter the traditional holiday shopping season this year, as Amazon postponed its traditional Prime Day promotion in the United States from mid-July to October 13 to October 14, meaning it could further dilute a holiday shopping period that becomes less traditional each year with the continued growth of online shopping.
Fibre2Fashion News Desk (DS)
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