US sees 15% growth in e-commerce in 2016

42% of the growth in the U.S. retail market last year was through web sales. That is a good trend for online retailers - e-commerce represented 11.7% of total sales in 2016. The less than good news for most, most of those gains went to Amazon.

E-commerce remains a particularly bright spot for the retail industry, as U.S. online retail sales grew faster in 2016 than they have in the past three years and continue to represent a healthy chunk of total retail spending growth, according to a report released this morning from the U.S. Commerce Department

Sales on the web reached $394.86 billion last year, a 15.6% increase compared with $341.70 billion in 2015. That’s the highest growth rate since 2013, when online sales grew 16.5% over 2012. 

For comparison purposes, total retail sales were $4.846 trillion for the year, a 2.9% jump from $4.708 trillion in 2015. However, those figures from the Commerce Department include the sale of items not normally bought online, including fuel and automobiles. 

Factoring those items out, as well as sales in restaurants and bars, total retail sales reached $3.375 trillion in 2016—a 3.9% jump compared with $3.247 trillion in 2015. That suggests that e-commerce sales represented 11.7% of total retail sales in 2016, more than a full percentage point increase compared with a 10.5% share in 2015. 

It also means that e-commerce represented roughly 41.6% of all retail sales growth in 2016. 

In the fourth quarter, U.S. e-commerce sales grew 14.3% to $123.61 billion from $108.18 billion. That’s far short of the 16.0% growth rate predicted based on earlier monthly reports of nonstore sales from the Department of Commerce. Nonstore sales occur mainly online but also include categories of retail sales that are declining, such as mail and phone orders, and door-to-door sales. Thus, the growth in nonstore sales is consistently lower than the growth in e-commerce sales. 

Still, online sales are growing much faster than store sales, which suggests that e-commerce remains a primary growth driver in the retail industry as a whole.

Total retail sales reached $1.30 trillion in the fourth quarter, a 3.9% increase compared with $1.25 trillion in Q4 of 2015. When factoring out the sale of items not normally bought online, like automobiles, fuel, and bar and restaurant sales, total retail sales reached $929.25 billion, a 3.3% jump compared with $899.46 billion in the same period a year ago.

That suggests e-commerce represented 13.3% of total retail sales in Q4 compared with 12.0% in Q4 of 2015.

Amazon is ranked No. 1 in the Internet Retailer Top 500 Guide.


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