1 in 6.5 People Are Surprised by this Blog Post
For many of us, the internet seems like our No. 1 store. During the pandemic, e-commerce was a lifeline to products. However, you have to keep the data in perspective as you make decisions.
E-commerce sales were just under 4% of all retail sales in 2008. It is expected to top 15% in 2021. That is impressive, steady growth for 13 years, but it is less than 1% growth per year on average.
Now, think of it in reverse. In-store sales make up 85% of all retail sales. Now that is a significant number. What does 15% mean? Around 15% of Americans don’t use the internet at all. Is that a big number? We tip 15% for service in a bar or restaurant. Is that a big number? It’s not “everyone” and it is not “no one.” The fact is that, today, e-commerce makes up 15% of all retail sales.
What is important is the trend. It is steady. It is growing. And you need to make sure that you are putting forth 15% of your efforts toward learning and experimenting in the digital world if you are a retailer.
What is noteworthy in that 15% is that Amazon makes up more than 40% of that number. Walmart makes up more than 7%. Between the two retail giants, they control half of all e-commerce retail sales. Amazon’s stock is around $3,000 per share.
Now, media usage is not retail sales. Our media mix is running around 60/40 for traditional media to digital media purchases for campaigns. So know that the 15% refers only to retail purchases and not how we get our entertainment, information or news. That is for a different post. This is how we buy products.
As you’ll see on the chart by eMarketer and CNBC, e-commerce is expected to accelerate growth and be at more than 23% by 2025. However, if you do a quick survey, I think you will find most people believe e-commerce is already at 23% and beyond. Yet in 2021, e-commerce makes up 15% of total retail sales. Let’s all keep the e-commerce exuberance in perspective. Plan for the future, but take care of the customers who are still enjoying personal sales.
I believe 1 in 6.5 people are surprised by this blog post. Is that “a lot” of people?
Mark Mathis III is chief creative & strategy officer, partner and cofounder of AMPERAGE Marketing & Fundraising.