Ecommerce is a megatrend for sure, disrupting the retail sector, having a huge impact on supply chains in terms of fulfillment and shipping, and having a profound effect on consumer behavior.
Supply Chain Digest Says... |
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But ecommerce may be taking a much needed breath of air.
After surging in 2020 in a stay at home economy that saw many retail stores forcibly closed for several months due to COVID 19, and those remaining open generally requiring mask wearing, it’s been a different story relative to growth off those tough 2020 comparisons.
US ecommerce sales actually fell 3.3% in Q3 versus Q2, according to data from the Census Bureau, versus a 1.1% decline in overall retail sales in the period. Year over year growth was just 6.6% - versus more than 30% growth seen in the last two quarters of 2020 and Q1 2021, with a drop to 8.9% growth in Q2 and then the even lower Q3 number.
And in the methodology the Census Bureau calculates it, US ecommerce sales as a percent of all retail is actually modestly trending down, from 13.8% in Q3 2020 to 13.0% in the third quarter this year, dropping or staying flat in all quarters in between, as can be seen in the graphic below.
What’s more, for the first time in a while, US retail store openings have outpaced store closings, at least through Q3.
According to The Daily on Retail, a financially focused industry research platform, there have been about 5,725 store opening announcements year-to-date through Q3 of this year. .
That is nearly double the 2,890-plus store closing announcements over the same period and “highlights retailers’ optimism and their recognition of the importance and longer-term benefits of physical stores,” according to the National Retail Federation.
US ecommerce Growth as Share of Overall Retail has Slowed
The flattening of ecommerce sales is being reflected in the announced results of publicly traded retailers as well.
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Best Buy, for example, saw a decline in ecommerce sales during the quarter ended Oct. 30, after such sales nearly tripled last year. Its US ecommerce sales fell 10.1% from a year earlier, when they surged a huge 174%.
Dick’s Sporting Goods announced flat on-line sales in the same quarter, after they had nearly doubled a year earlier.
However, Walmart’s US ecommerce sales grew 8% in its Q3 - but Amazon’s on-line sales in its 2021 third quarter were up just 3% versus the same period last year.
Is ecommerce growth slowing - or just taking a briether? Let us know your thoughts at the Feedback button section below.
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