More digital purchases of categories with low online sales will drive retail ecommerce growth
Online apparel sales continue to capture a greater share of US retail ecommerce sales, as the category, along with the computer and consumer electronics sector, help fuel overall market growth, according to a new report from eMarketer.
In 2013, eMarketer estimates US retail ecommerce sales will total $259 billion, a 14.8% annual increase over 2012’s $225.5 billion. The longer-term outlook is also bright, with digital sales expected to increase at a 14% compound annual growth rate (CAGR) from 2012 to 2017, according to the eMarketer report, “US Retail Ecommerce: 2013 Forecast and Comparative Estimates.” Smartphone and tablet shoppers will be strong growth drivers. Mobile already accounts for 11% of ecommerce sales, and its share will jump to 25% by 2017.
Computer and consumer electronics, as well as apparel and accessories, account for the bulk of US retail ecommerce sales. Combined, they will contribute 42.9% of total retail ecommerce sales in 2013, rising to 45.6% by 2016. At the other end of the spectrum, large retail categories like auto and parts, as well as food and beverage, have disproportionately low sales online, indicating a lot of room for ecommerce growth. These categories, purchased largely offline, also contribute to online retail’s limited share of total sales.
A mix of larger and smaller online product categories will post the highest CAGRs from 2012 to 2017. Two of the best-performing online categories—apparel and accessories along with books, music and video—will register high CAGRs of 17.2% and 16.3%, respectively, according to eMarketer estimates. Meanwhile, food and beverage, with low online sales, is expected to produce the second-highest CAGR at 17%, a sign of an up-and-coming category.
Despite the positive outlook, only 6% of US retail sales came from ecommerce in 2012, according to eMarketer calculations. A number of research sources believe ecommerce is capable of eventually achieving a 20% share—or even higher. But for that to happen, large spending categories need to gain more traction online.
With nearly three-quarters of US internet users already making purchases online, ecommerce growth will rely more on increased spending from existing buyers than on new spending from first-time online buyers.
eMarketer’s US retail ecommerce model forecasts key metrics from both a supply and demand perspective. To produce the online sales forecast, eMarketer uses the latest historical retail ecommerce sales estimates from the US Department of Commerce (DOC) as a benchmark. Macroeconomic trends, data and analysis from ecommerce experts who have visibility into retailers’ online sales results, and surveys of consumer shopping behavior and attitudes all inform eMarketer’s ecommerce sales forecast.
eMarketer derives its digital shopper and buyer forecasts by comparing estimates from other leading research organizations and weighing overall ecommerce trends. eMarketer forecasts online shoppers and buyers starting with a base age of 14 because research shows that people become more involved with ecommerce in their early teens.
Of the comparative estimates for ecommerce growth, eMarketer’s is the most aggressive, with a 14% CAGR. This rate stands apart even more considering that several firms based their CAGRs on shorter forecast periods, resulting in a smaller drop off in growth as the ecommerce market matures. eMarketer believes waves of technology and business model innovation ensure strong ecommerce growth at least out to 2017.