US Online Retail Sales to Surpass $1.2 Trillion; Shopify Hires Red Van – Digital Transactions

Online retail sales in the U.S. will continue to grow at a steady pace and continue to account for more of overall retail sales, suggests FTI Consulting Inc.’s “2024 Online Retail Sales Report.” The research projects U.S. e-commerce sales at $1.2 trillion this year, up 9.1% from $1.1 trillion in 2023.

The forecast comes against the backdrop of online sales continuing to account for an increasing share of overall retail sales, with FTI predicting that e-commerce will account for 22.7% of all retail sales in 2024, up from 21.6% in 2023.

“E-commerce sales are seeing more predictable growth and market share gains now that we have the post-pandemic transformation behind us,” the report reads.

In terms of growth in the share of retail sales made online, Washington-based FTI says it is an improvement from a near-flat 2021-2022 period, “but (it is) slowing compared to pre-Covid levels and will continue to decline through the rest of the decade. Ultimately, we expect U.S. e-commerce to account for closer to 35% of total retail sales by the next decade.”

FTI says many product categories have already reached saturation point, including toys and hobby supplies, consumer electronics, computer hardware and software, and sporting goods.

Other retail trends are also influencing e-commerce. More retailers are using their stores as fulfillment centers, which can better manage returns and inventory by combining digital and in-store customer experiences, FTI said. In addition, retailers are closing unprofitable stores and cutting labor costs. A study by investment bank UBS this spring predicted as many as 45,000 retail store closures over the next five years, Dow Jones reported.

In related news, consulting firm Red Van has partnered with online and brick-and-mortar retail services provider Shopify Inc. Online Store where Rev Van will offer Shopify services to its customers.