Total U.S. retail sales, including auto and fuel, will drop 10.5%, to $4.894 trillion in 2020, a total not seen since 2016, forecasts eMarketer Inc. That’s sharper than the 8.2% slump in 2009, in the midst of that recession more than 10 years ago. E-commerce, however, is the bright spot. EMarketer says online retail sales will increase 18% this year to $709.8 billion from $601.7 billion in 2019.
Processors continue to report data that reflects online shopping growth. ACI Worldwide Inc. says its retail e-commerce transaction volume globally increased 81% in May compared to May 2019. Sportswear and sporting goods was up 216% for the biggest gain. The increase is coming with less risk. The fraud attempt rate by value clocked in at 3.4%, down 0.5% year-over-year and also down from 4.4% in April.
As strong as e-commerce sales have been, they have not been enough to offset declines at physical locations. New York City-based eMarketer says brick-and-mortar sales will weigh down overall retail sales in the long term. It estimates sales at these locations will decrease 14% to $4.184 trillion this year. “It will take up to five years for offline sales to return to pre-pandemic levels,” its report predicts.
“In just a couple weeks, as Americans sheltered in place, retail sales fell dramatically in March,” said Cindy Liu, an eMarketer senior forecasting analyst at Insider Intelligence, the new parent company of eMarketer and Business Insider Intelligence. “With sales hitting their lowest point of the year in Q2, it will take years before consumer activity returns to normal levels.”
The increase in consumer adoption of e-commerce has accelerated some trends. “Everything we’re seeing with e-commerce is unprecedented, with growth rates expected to surpass anything we’ve seen since the Great Recession,” said Andrew Lipsman, eMarketer principal analyst at Insider Intelligence. “Certain e-commerce behaviors like online grocery shopping and click-and-collect have permanently catapulted three or four years into the future in just three or four months.” The top-growing e-commerce categories are food and beverage at 58.5% and health, personal care, and beauty at 32.4%.
The uptick in e-commerce sales will push online powerhouses into even stronger positions, eMarketer says. Amazon.com Inc. will control 38% of total retail e-commerce sales in 2020, followed by Walmart Inc. at 5.8%, and eBay Inc. at 4.5%. Other top 10 members are Apple Inc., The Home Depot Inc., and Best Buy Co. Inc.