• Market Crumbs

2020 E-commerce Sales Dwarfing 2019 So Far


Image via rupixen.com on Unsplash

Everyone knows that e-commerce has become the preferred way to shop over the years. As a matter of fact, last year e-commerce did something it hasn't done since at least 2000 when data started.


According to a Digital Commerce analysis of the U.S. Commerce Department's year-end retail data, e-commerce penetration of total retail spend hit 16% in 2019, up from 14.4% in 2018 and the largest annual increase since at least 2000. Ten years ago, e-commerce penetration was just 6.4%.


E-commerce sales in the U.S. grew by 14.9% last year to $601.7 billion. Although e-commerce sales continued to show solid growth, the $600 billion and change in e-commerce sales last year barely put a dent in the $3.7 trillion in total retail sales.


Due to COVID-19, consumers have increasingly turned to online shopping. As a result, this year's total e-commerce sales could surpass last year's total by as early as October, according to Adobe's Digital Economic Index. Their data shows U.S. consumers have spent a total of $435 billion online so far this year.


2020 is likely to be a record year as their data shows 2019's total could be surpassed by October 4, even as Amazon's Prime Day, Black Friday, Cyber Monday and Christmas would still follow thereafter.


"We've just trained the consumer to shop a different way," Sonia Lapinsky from retail consultancy AlixPartners said. "They're now comfortable at home. They're used to buying things without ever having to leave their house."


Despite the surge in online shopping, growth is slowing as some consumers start to venture back to shopping in person as a result of re-openings. Adobe's data showed a 55% increase in e-commerce spending in July compared to the same period a year earlier. However, the 55% growth is down from the previous two months which both saw annual growth of more than 70%.


As a result of the coronavirus, a new trend also is emerging this year. After Walmart first announced a few weeks ago that it would be closed on Thanksgiving Day, numerous retailers such as Target, Dick's Sporting Goods and Best Buy all decided to also close on the holiday as well and encourage customers to shop online.


While the return to normalcy from the coronavirus remains a large unknown, it's increasingly clear that e-commerce continues to chip away at brick-and-mortar retailers' dominance and should continue to do so well beyond the pandemic.


Leftover Crumbs

  • Tim Cook joins billionaires club. Apple CEO Tim Cook has joined the elite billionaires club as a result of Apple's recent share performance, which has seen it approach a $2 trillion market capitalization. Cook also joined a more exclusive club of CEO billionaires who did not start their companies. According to Bloomberg, Cook owns 847,969 Apple shares, or about 0.02% of the company, worth a total of about $375 million. Cook's remaining net worth was accumulated through "proceeds from previous share sales, dividends and other compensation."

  • SoftBank turns it around. SoftBank Group reported a $12 billion profit in its latest quarter after posting a record $13 billion loss last year. The Vision Fund reported an investment gain of $2.8 billion for the quarter after posting an $18 billion loss last year. Performance was boosted by holdings in Uber and Slack as well as Lemonade, which went public recently. SoftBank said in March it plans to sell $41 billion worth of assets to repurchase shares and reduce its debt.

  • Lucid claims 500-mile range. Electric vehicle maker Lucid Motors said its new sedan is the first of its kind to reach a 500-mile range. Lucid said independent testing found the Lucid Air has an estimated range of 517 miles. The vehicle will go on sale in early 2021 and will be priced "well north of" $100,000 according to Lucid CEO Peter Rawlinson. Lucid will introduce a cheaper sedan as well as use the vehicle's design to build an SUV in early 2023.

  • Boeing cancellations mount. Boeing announced cancellations outpaced new sales in July, marking the sixth-consecutive month to do so. Boeing had 43 cancellations and no new orders last month as the company now has a net negative orders of 836 planes so far this year through July. Boeing's backlog now stands at 4,496 orders as it delivered just four planes last month.

  • Walmart partners with Instacart. In its latest attempt to take on Amazon and specifically, Whole Foods, Walmart has signed a deal with Instacart to offer same-day delivery in select U.S. markets. The partnership makes sense as Instacart already has partnerships with Aldi, Target, Costco, Albertsons, Kroger and Walmart's Sam's Club. "Today, we welcomed Walmart to the Instacart marketplace for the first time in the U.S. Instacart now delivers from Walmart locations in three California markets - Los Angeles, San Francisco and San Diego - as well as Tulsa, Oklahoma," Instacart said.