E-commerce has been growing in leaps and bounds in the last several years, and now the overall market is starting to take notice.
The e-commerce ecosystem is rapidly evolving thanks to advances in online-payment processing and electronic-payment technology, as well as the willingness of almost all merchants to accept credit cards online.
And while e-commerce's portion of the total share of the US retail market is still relatively slim, nearly all of the growth in the retail sector now occurs in online sales.
Below, we've outlined the market outlook for e-commerce, listed some online-payment statistics, and examined some online-payment trends.
BI Intelligence, Business Insider's premium research service, estimates that US consumers will spend US$385 billion online in 2016. Furthermore, BI Intelligence expects that number to rise to US$632 billion in 2020.
This is unsurprising considering e-commerce's healthy growth. While the US-retail average growth rate in the first half of 2016 was just 2% for total retail, it was 16% for e-commerce.
The number of online shoppers grew by nearly 20 million between 2015 and 2016. And these 224 million shoppers are spending more, as the total amount spent online grew from US$61 billion in the first quarter of 2015 to US$68 billion in Q1 2016. Finally, these customers are transacting more frequently, as the number of online transactions has risen by 115 million between 2015 and 2016.
The shift to digital has begun, and three segments are leading the way in that regard: media, sporting goods and hobbies. More than half of these total sales will occur online in 2016.
Electronics, meanwhile, has remained steady since 2011, and since 2014, nearly one in four electronics purchases each year have been made online. Best Buy has capitalised on this trend by beefing up its e-commerce efforts in the fourth quarter (aka holiday season). But Amazon is starting to challenge Best Buy's dominance, and has been expanding its market share since 2013.
Despite logistical barriers, consumers are also showing a growing interest in buying furniture online, as online furniture sales are quickly closing in on 25% of the total furniture-sales market. In response to this trend, Wayfair launched an app called Wayfairview that lets shoppers see how furniture would look in their homes. As a result, sales have more than doubled in two years.
Apparel and accessories, however, have been slower to embrace the digital. And yet, 25% of purchases occur online, which accounts for nearly US$80 billion in sales.
Finally, e-commerce accounts for 8% of all health and personal-care items sold in 2016.
(Source: Business Insider)