The boom in e-commerce, which was touched off more than a year ago by the coronavirus pandemic, may be showing signs of losing steam.
U.S. e-commerce sales in the second quarter totaled $222.5 billion, up 9.1% from the same quarter a year ago, according to numbers released Thursday by the Commerce Department. That rate of increase is the slowest since at least the first quarter of 2018 and down markedly just since the first quarter, when e-commerce sales registered a robust 39% jump year-over-year.
Before the latest quarter, the slowest rate of year-over-year increase for e-commerce sales over the past three years was 11.1%, registered in the fourth quarter of 2018, according to the Commerce statistics.
E-commerce as a fraction of total retail sales has also shown a slowdown, the Commerce report shows. While online sales accounted for a 15.7% share of total retail sales in the second quarter last year, that share slipped to 13.3% in the latest period. In part, this is due to a robust pickup in overall retail sales in the latest quarter, which registered a 28.2% rise year-over-year. That’s a dramatic turnaround from a negative growth rate a year ago of 3.6%.
The slowdown, however, doesn’t necessarily reflect total payment activity. The Commerce Department cautions that, while its definition of e-commerce embraces sales made on the Internet, mobile apps, and other remote methods, “payment may or may not be made online.”
Beginning in March last year, U.S. consumers turned to online channels when the pandemic forced businesses to shutter temporarily and people were advised to stay home. Many consumers turned to online sites and mobile wallets for the first time, or began using the technologies more frequently than before. Some historically card-present businesses, such as restaurants, turned to tabletop remote checkouts, such as QR codes, to accommodate customers.
Now, with higher vaccination rates and stores reopening in many places, in-person commerce appears to be rising smartly. Overall U.S. retail sales totaled $1.67 trillion in the latest quarter, up nearly 6% just from the first quarter.
Still, the latest e-commerce results from the Commerce Department are not necessarily reflected in numbers reported recently by largely e-commerce merchants. Amazon.com Inc., for example, reported late last month that its second-quarter sales came to $113 billion, up 27% year-over-year. Shopify Inc., number two to Amazon in U.S. retail e-commerce sales, registered $42.2 billion in gross merchandise volume, up 40% for the quarter.