Electronic Shopping
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 46,000 electronic shopping retailers in the US are online-only retailers, with no or limited-format physical stores. The business format ranges from the independent specialized seller with one or a few lines of products to the large conglomeration of businesses selling a broad range of products on a single e-commerce website (Amazon, Etsy). Websites that bring together third-party sellers are known as marketplaces and typically earn revenue by charging sellers a fee that is either fixed or based on a percentage of sales or a number of transactions.
Fierce Ecommerce Competition
Electronic shopping sites must find ways to stand out in an e-commerce market flooded with domestic and foreign retailers as well as dominant players like Amazon.
Delivery Race Slows
The need for speed in ecommerce delivery is easing with shoppers showing a greater willingness to wait for deliveries of household items as concerns grow over the cost of fulfillment.
Industry size & Structure
The average electronic shopping retailer operates out of a single location, employs 16 workers, and generates $25 million annually.
- The electronic shopping retailer industry consists of 46,000 companies that employ over 734,100 workers and generate $1.15 trillion annually.
- The industry is concentrated at the top and fragmented at the bottom with the top 20 firms accounting for about 53% of industry sales.
- Large companies include Amazon, eBay, Qurate, Etsy, Wayfair, and Zara. Many large companies have international operations.
Industry Forecast
Electronic Shopping Industry Growth
Recent Developments
May 24, 2024 - E-commerce Sales Growth in Q1
- US e-commerce sales rose 8.5% in Q1 2024 over Q1 2023, reaching $268.1 billion, according to the latest analysis of US Department of Commerce data by Digital Commerce 360. E-commerce penetration was 22.2% of total retail sales in Q1 2024 year over year, which was the all-time Q1 high since the data has been tracked going back to 2000. According to James Risley, research data manager and senior analyst at Digital Commerce 360, “Since Q1 2020, this is the fastest Q1 growth we’ve seen for e-commerce, and e-commerce growth accounted for a huge share of total retail growth for the period (52.8%). That means price-conscious shoppers are using e-commerce to find the best offers and shifting buying to online amid inflationary worries.” When compared to the previous quarter, e-commerce sales declined by 17%, which is the norm as Q4 sales were boosted by holiday sales.
- Omnichannel options remain popular with retailers, with high adoption rates of buy online, pick up in store (BOPIS) (78.3%) and in-store stock statuses (65.4%) by retail chains in the Top 1000, according to the 2024 Omnichannel Report from Digital Commerce 360. One option losing some overall traction is curbside pickup, which has fallen to 25.3% usage by the Top 1000 merchants compared to a high of 55.1% in 2021 during the pandemic. Curbside pickup remains a priority for grocery stores and office supplies merchants. Customers are adjusting their shopping habits to the new tools available. Registering as the most popular omnichannel activity, about 62% of consumers said they checked product availability at a nearby store online before making a purchase. Shoppable video on social media and streaming platforms was noted in the report as an increasingly common shopping option with implications for the largest online retailers and their retail media networks.
- Consumer confidence levels fell in April 2024 from March 2024, marking a third consecutive month of weakness, according to data from The Conference Board. The Conference Board’s consumer confidence index was 97 in April 2024 from 103.1 in March 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income.” Peterson added that confidence declined among consumers of all age groups and for all income groups except those in the $25,000 to $49,999 range. Plans for vacations, home purchases, and large appliances decreased on a six-month basis.
- According to a recent ConsumerSignals survey by Deloitte, about 75% of consumers worldwide have made at least one splurge purchase to treat themselves in the past month. The average amount spent on the last splurge purchase was $45. The survey examined consumer spending behavior and found that the three main drivers for splurge purchases were comfort (22%), relaxation (15%), and practicality/usefulness (12%). The most popular categories for splurge purchases included food and beverage (43%), clothing and accessories (18%), personal care (11%), electronics and accessories (8%), toys and hobbies (6%), health and wellness (5%), home and kitchen (3%), and household goods (3%). According to the Spending Intentions index, global total spending intentions remained consistent in January compared to December and were significantly higher than a year ago.
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