Online Sales to Peak $645 billion in 2020

It is expected that online sales will reach $645 billion in 2020; but growth slowing Online retail sales growth may have reached an inflection point.

 

Online sales growth has slowed for four consecutive quarters for the first time since 2012, according to FTI Consulting's 2019 U.S. Online Retail Forecast, and may have reached an inflection point that could result in slowing growth moving forward.

 

The online channel still captured nearly 43% of total retail sales growth in 2018, the Retail & Consumer Products practice estimates, with continued market share growth of approximately 1 percentage point expected annually through 2022.

 

"There may be nothing wrong with the online sales channel except for the fact that it is beginning to experience an inevitable slowing of sales growth. For omnichannel retailers, recognizing an inflection point for their product categories should impact business planning decisions. Failing to do so could result in over-investment in costly online expansion projects, such as distribution centers and logistics support, under a potentially erroneous assumption that high growth rates are sustainable for a prolonged period." The forecast projects that online retail sales will reach $645 billion in 2020 and will top $1 trillion by late 2025.

 

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Online retail sales will achieve a market share of total retail sales of 21% by 2025, compared to 15% in 2019, and will approach an expected ceiling of 25% near the end of the next decade, or 30% if the grocery category is excluded.

 

Amazon.com continues to maintain a significant presence in the online retail space, with its online market share expected to increase to 43% in 2019 from 41% in 2018, eventually topping 50% in 2024, according to the forecast.

 

The online retailer's sales growth rate may mirror the overall slowing trend in e-commerce sales, with growth easing to 19% in 2019 from 30% in 2018, the forecast projects.