How High Will E-commerce Sales Go?
E-commerce's share of total retail sales is expected to rise from 8.9% in 2017 to just over 15% in 2022, totaling nearly $892 billion. Digital-impacted retail sales, which include purchases made online and purchases made in-store by consumers who used a digital channel to research or browse, will rise even higher. Mobile will be a key driver of digital growth.
As e-commerce sales continue to grow, some observers wonder whether e-commerce will eventually overtake or completely replace physical store sales. CBRE has studied this question extensively and found that demographic variables, usage of internet, ease of payment and infrastructure access will play the largest roles in determining the future of e-commerce penetration. We outline several key trends below that will mark both medium- and long-term e-commerce growth.

Forecast E-Commerce Sales

Figure 1: Forecast E-commerce Share of Total Retail

Source: CBRE Research, Q1 2022.

E-commerce’s share of total retail sales is expected to rise from 20.7.% in 2021 to 23.4% in 2023, averaging 1.3 percentage point each year.

However, digital-impacted retail sales, which include purchases made online and purchases made in-store by consumers who used a digital channel to research or browse, are expected to rise even higher. Digital-impacted sales are forecast to total more than $2.4 trillion and account for more than 58% of total retail sales by 2023.

Looking Beyond: Is There a Ceiling?

It is difficult to predict where e-commerce’s share of total retail sales will peak. The answer will depend heavily on several factors. A ceiling, if it does exist, will vary significantly by digital channel, geography and category. South Korea has an e-commerce penetration rate as high as 35%, so the U.S. still may have a lot of potential growth.

Variations by Retail Category

E-commerce growth has varied greatly by retail category and by retail price point. Across categories, soft goods like apparel and digitally driven goods like electronics have shown higher e-commerce growth than other categories like health and beauty, which consumers still prefer to purchase in-store. Price point is also an important determinant of e-commerce penetration, with luxury, off-price, discount and value retailers showing greater resistance to online growth than mid-priced brands. Though newer technologies, such as virtual reality and facial recognition, may make online purchases easier across all categories, the ceiling for e-commerce growth is likely to differ by category.

Geographical Differences

Though reliable data on e-commerce share by U.S. regional markets is very limited, e-commerce buying patterns are expected to vary among urban, suburban and rural consumers. These variations reflect different levels of access to physical store networks, lifestyles and distribution costs for retailers. Online grocery growth, for example, is likely to reach higher levels in urban centers than in suburban and rural areas, given downtown consumers’ limited access to large supermarkets. At the same time, other categories will see lower e-commerce growth in the cities than in the suburbs, since urban consumers have easy access to dense physical store networks.