What Is the Share of E-Commerce in Overall Retail Sales?
Understanding how retailers count online and in-store purchases is key
May 16, 2022 4 Minute Read
E-commerce is driving rapid transformation in the retail sector, but there is little consensus on what percentage of retail sales occur online. Depending on sources and methodology, the share of e-commerce can vary anywhere from 14% to more than 20%. Below is an overview of core definitions and key e-commerce statistics on sales and market share.
Figure 1: Total E-Commerce Sales and Growth RatesSource: U.S. Census Bureau, Quarterly E-Commerce Report, CBRE Research Q1 2022.
E-commerce sales totaled $871 billion in 2021 and have been growing at an average of 16% annually since 2011, with 2020 growth increasing by 32%. 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.
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 online and is picked up in-store, some retailers consider the transaction an e-commerce sale while others classify it as a physical store sale, depending on whether the retailer has a separate e-commerce division. For example, retailers such as Macy’s have a separate e-commerce arm for accounting purposes. Their buy-online-pickup-in-store (BOPIS) sales will typically count as online sales. Retailers that do not have a separate arm for their online business will likely count BOPIS sales as in-store purchases. Because the industry has not set a standard of measurement for what defines an online versus 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
There are three ways to capture e-commerce penetration. The first way is comparing total e-commerce sales (Figure 1) to total retail sales, which includes sales across all categories. Using this method, the e-commerce share of total retail sales was 11.8% in 2021 (Figure 2).
The second way is to exclude restaurant sales in overall retail sales, which increases 2021 e-commerce penetration to 13.2%. Lastly, if we further exclude motor vehicle, parts dealers and gas, that figure jumps to 17.2%. Depending on the definition, the ranges are quite large.
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.
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