US online retail sales to reach $1.2 trillion this year: report

2024.07.18

A customer using a smartphone to shop. U.S. online retail sales are forecast to rise nearly 10% in 2024, per a new report. Creative via Getty Images

Brief:

Indicating the continued growth in e-commerce, U.S. online retail sales are forecast to rise 9.8% to $1.2 trillion this year, according to a new report from FTI Consulting.

U.S. e-commerce sales will make up 22.7% of the overall retail market share this year, up from 21.6% last year.  Online sales growth accounted for 57% of total U.S. retail sales in Q1, its highest rate since 2017 excluding the pandemic period. 

Total U.S. e-commerce sales this year will reach “high- to mid-single-digit sales growth for several more years,” a shift from the mid-teen annual growth rate it experienced in the decade before the COVID-19 pandemic, according to the report. 

Insight:

FTI Consulting research has charted the continued e-commerce growth in the years following the beginning of the COVID-19 pandemic. In 2022, the firm predicted that e-commerce sales would exceed $1.07 trillion, a milestone it had previously projected would occur in 2025. The following year, its research estimated that online retail sales would reach $1.14 trillion, a 10% jump from 2022. 

E-commerce market share of total retail sales are expected to plateau to around 35% in the next decade, according to the report. However, several product categories have already reached that plateau including toy and hobby, office supply, consumer electronics, music and videos, books and magazines, computer hardware and software, home furnishings and sporting goods. 

“E-commerce in the U.S. is in a maturing phase as it returns to pre-pandemic normalcy, but it continues to capture market share, primarily from store-based retailers,” J.D. Wichser, senior managing director and leader of the retail and consumer products practice at FTI Consulting, said in a statement. “As the retail landscape evolves, it is critical for businesses to turn their strategies toward omnichannel integration and technological innovation while adapting to shifting consumer demands to maintain a competitive edge in a crowded field.”

The U.S. retail industry is already responding to some market changes by shifting stores to fulfillment centers, closing underperforming locations, using AI, reducing labor and blending an online and offline customer experience, per the report. 

Other research suggests that e-commerce sales will rise in the coming years. A June Forrester report projects that U.S. online retail sales will reach $1.6 trillion by 2028 and will comprise 28% of total U.S. retail sales.