It’s hard to make heads or tails of the headlines from these past 18 months when it comes to the economy and retail health in the US.
On the one hand there is a lot of optimism. Lockdowns are lifted, borders are opening, and almost 60% of the US population is fully vaccinated. After spending much of the past year indoors, shoppers are ready to get out of their homes and upgrade their wardrobes. Retailers and brands, for the most part, had upbeat Q2 and Q3 earnings.
On the other hand, consumer confidence hit a 7-month low in September as inflation worries continue to swirl and brands like P&G announce price increases to counter higher raw material and freight costs. Global supply chain disruptions are impacting every category from footwear to cars and across the entire ecosystem from truck driver shortages to congested ports to capacity constraints that can’t meet demand.
Our forecast: Despite the headwinds, retail sales were up 15.5% YoY, crossing the 6 trillion dollar mark for the first time in 2021, according to our latest forecast. We expect sales to push past $7 trillion by 2024, with ecommerce accounting for nearly a quarter of total retail.
The euphoria and optimism of lifted lockdowns has resulted in revenge shopping across many “touch-and-feel” retail categories like apparel, accessories and beauty. This has had a positive impact on sales as consumers flocked back to brick-and-mortar, potentially shifting some of the dollars away from ecommerce. Store sales are forecast to reach $5.543 trillion, up a record 15.4%.
Meanwhile, we expect retail ecommerce sales to grow 16.1% to nearly $1 trillion in 2021, making up more than 1 in 10 dollars spent. Sales made via mobile helped to drive ecommerce’s growth during the pandemic; we expect mcommerce will make up 39.4% of retail ecommerce dollars this year. By 2025, ecommerce sales will reach $1.607 trillion, up 13.8% YoY.
Retailers ranked: It is no surprise that Amazon ranked No. 1 in retail ecommerce sales share, gaining nearly 2 percentage points and commanding a 41.0% market share in 2021. The company had big wins this year, including moving Prime Day to kick-off the back-to-school season and its first ever October beauty event, which offered online deals for beauty products from Amazon and other retailers for 3 weeks.