Line chart shows the rise in online sales vs. traditional retail. Left y-axis: Percent of e-commerce sales (%), right y axis: Retail sales in billions ($), x-axis: 2005 – 2021. During the 2008-2009 recession of 2008, e-commerce sales were about 4% of retail sales, which were roughly $336 billion in February 2009). By the end of Q1 2020, e-commerce sales represented more than 33% of total sales, spiking to about 51% in April 2020. Meanwhile, retail sales dropped sharply from about $527 billion in February to about $413 billion in April, largely recovering partially to about $537.5 billion by late August. As of year-end 2021 retail sales stood at about $538 billion and e-commerce sales at 14%. As of the end of February 2022, retail sales totaled over $658 billion with e-commerce sales as of the end of December at about 13%.
Sources: Bloomberg and Wells Fargo Investment Institute. Retail sales: monthly data from January 1, 2005 to February 28, 2022. E-commerce sales: quarterly data from January 1, 2005 to December 31, 2021.
- Consumer spending, returning to its pre-pandemic trend, appears poised for a rotation from spending on goods to frontline services industries (like travel and entertainment) as the pandemic subsides and the economy reopens.
- We expect e-commerce’s share of online shopping to continue growing, albeit at a slower pace than during the pandemic.