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U.S. E-Commerce Sales Rise 9.3% in 2021 Second Quarter

Digital sales hit $211.70 billion in the second quarter, up a modest 9.3% from $193.62 billion for the same period the prior year.

Digital Commerce 360
Digital Commerce 360

Author Jessica Young - to see original post click here.

After 12 months of huge online shopping surges while COVID-19 took hold in the U.S., e-commerce growth slowed significantly year over year during the second quarter, according to U.S. Department of Commerce figures released Thursday. The deceleration in consumer spending was expected because Q2 benchmarks against the peak of online pandemic shopping in the same period in 2020. Also, as more U.S. consumers received the vaccine in Q2 and coronavirus cases declined, shoppers flocked back to physical stores and shifted some of their dollars to the brick-and-mortar channel from e-commerce sites.

Digital sales hit $211.70 billion in the second quarter, up a modest 9.3% from $193.62 billion for the same period the prior year. In Q2 2020, e-commerce soared by nearly five times that rate—a record 43.7% year over year—and each quarter since then registered growth in the 30-40% range, according to Commerce Department data. The 9.3% uptick marked the slowest year-over-year growth rate of any quarter or year since the Great Recession in 2008. But the fact that consumers’ online spending during Q2 still increased over the same three months in 2020 is noteworthy as it’s the first full period that can be compared with another pandemic quarter rather than a typical year with normal buying patterns.

Online penetration hovers around 20%

Nearly $1 in every $5 spent on retail purchases continued to come from digital orders in the second quarter, according to a Digital Commerce 360 analysis of Commerce Department data, and online’s share of total retail sales was still elevated from pre-pandemic levels. But penetration dipped—down to 18.6% in Q2 from 20.3% during the same time last year.

Historically, digital’s share of total retail sales has grown incrementally each year as shoppers get increasingly comfortable purchasing items online and retailers fine-tune e-commerce operations to deliver products more quickly. But the pandemic turbocharged that trend. Temporary store closures in Q2 2020 and then lingering consumer anxiety over being in crowded spaces during a global pandemic pushed many to shop on the web—some for the first time, many in new categories and nearly all more frequently. And that gave a sizable boost to online penetration. But in the most recent second quarter, different factors were at play.

Q2 2020 spanned a period when offline retail declined 4.4% because many physical stores were shuttered. This year, offline sales for the quarter jumped 22.2%—the highest-ever recorded growth for the channel—as more shoppers headed to the stores. And because offline retail spiked at more than double the rate of e-commerce in Q2 2021, penetration dropped accordingly.

Digital Commerce 360 studies non-seasonally adjusted Commerce Department data and excludes spending in segments that don’t typically sell online, such as restaurants, bars, automobile dealers, gas stations and fuel dealers.

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