Economists' Outlook

Housing stats and analysis from NAR's research experts.

Weekly Retail Update: February 22, 2021

Quarterly e-Commerce

In a year like no other and dramatically impacted by COVID-19, the economy sank into a recession. The combination of increasing virus cases, stay-at-home orders and business operation limitations led to significantly reduced retail brick-and-mortar foot traffic and as a result, substantial retail store closures and significant decreases in retail employment. Although many retailers permanently shuttered, many shift channels to focus on e-commerce for which was already accelerating. As the pandemic progressed, more and more shoppers turned to online shopping.

Line graph: e-Commerce Retail Sales Quarterly, SA, Q1 2000 to Q2 2020

4Q U.S. Census data indicates U.S. consumers spent an astonishing 32.1% more online than in 4Q 2019. Seasonally adjusted estimates of e-commerce sales totaled $206.7 billion for which represents a decline of 1.2% from the $209.2 billion recorded in 3Q 2020. While 4Q’s online growth is almost double the 16.5% growth recorded in 4Q 2019, it represents a deceleration from early pandemic periods.

Considering mid-March, the president made an COVID-19 emergency declaration, 1Q 2020 U.S. Census Bureau data captured only a small portion of e-commerce spending as a result of COVID-19. Online sales for 2Q 2020 indicated a transition of consumer shopping behavior as consumers frantically sought essential products amid store closures and stay-at-home orders.

Line graph: e-Commerce Retail Sales as a Percent of Total Sales Quarterly, SA, Q1 2000 to Q2 2020

Second quarter e-commerce sales were $211.5 billion, an increase of 44.5% from the same quarter a year ago and a 32% increase from 1Q 2020. Total retail sales for the second quarter of 2020 were $1,311.3 billion where e-commerce sales in the second quarter of 2020 accounted for 16.1% of total sales. The scope of the increase from pre-COVID levels of 11.3%, 4Q 2019 to 2Q 2020 16.1% represents a tremendous uptick of e-commerce penetration within a short period.

Bar chart: e-Commerce Retail Sales, Year-Over-Year Growth Quarterly, SA, 2019 and 2020

Online shopping tapered in 3Q 2020 as consumers settled into their "new normal" and as stores eased into reopening. Despite the slowdown, e-commerce grew 36.6% in 3Q 2020, up from the 17.3% recorded in 3Q 2019. E-commerce’s share of total retail sales historically increases every year as consumers become more at ease with online shopping and as retailers optimize their e-commerce operations.

Line graph: U.S. Total Retail vs. e-Commerce, Year-Over-Year Growth 2011 to 2020

While 4Q 2020 U.S. retail e-commerce sales slightly decreased from 3Q 2020, total retail sales for 4Q 2020 increased by 0.5% from the $1,469.7 billion 3Q 2020 figure to $1,476.9 billion. 4Q 2020 e-commerce estimates increased 32.1% year-over-year while total retail sales increased 6.9% over the $1,381.3 billion recorded the same time last year. E-commerce sales in 4Q 2020 account for 14.0% of total sales, a marginal decrease of from 3Q 2020s 14.3% of total sales.

Total e-commerce sales for 2020 were estimated at $791.7 billion, which represents an uptick of 32.4% from 2019 sales. Total retail sales over 2020 rose 3.4% from 2019 sales. E-commerce sales in 2020 accounted for 14.0% of total sales whereas, e-commerce sales in 2019 made up 11.0% of total sales.

Despite e-commerce's slowdown in 4Q 2020, we are in a retail environment that reaches beyond brick-and-mortar. January’s advanced retail sales estimate non-store retail sales rose 10.9% from December and an incredible 28.7% above January 2020 sales. While e-commerce's growth rate will ease up to some extent as retail brick-and-mortar regains some sense of normalcy throughout 2021, we expect consumers to maintain many of their digital habits.


Comment Policy

The opinions expressed in reader comments sections on this website are those of the reader and not NAR or REALTOR® Magazine.

About Economists' Outlook

Visit this blog daily to see what NAR experts are saying about the economy, the housing market, and other factors that will impact your business.

Housing Minute

Housing Minute is a monthly video series highlighting the latest housing data from the National Association of REALTORS® in a minute or less.