Headlines

E-Commerce’s Retail Surge Stalls

Upswing during pandemic leveling off as bricks and mortar proves it’s “still the best play.”

Published

1 year ago

March 21, 2023

INSTORE Staff

While e-commerce sales in the U.S. topped $1 trillion for the first time in 2022, e-commerce’s share of overall retail sales has stalled between 14% and 15%, GlobeSt.com reports.

“The e-commerce share of retail was growing at about 1 percent per year prior to the pandemic, but the surge in 2020 pulled forward growth by about three years,” James Bohnaker, Senior Economist at Cushman & Wakefield, told the real estate news site. “What we have seen since that initial surge is a leveling off in terms of the penetration rate.”

Bohnaker thinks the saturation point for direct-to-consumer is a 20 percent share of retail—and that’s not likely until the end of this decade.

More bullish on the potential growth curve for e-commerce’s share of retail is CBRE’s Head of Retail Research for the Americas.

“Our latest data suggests that, overall, the e-commerce share of total retail will grow to 29.3 percent by 2030,” said Brandon Isner. “Consumer preference is the primary factor, as we have more agility and choice than ever before.”

But Mark Masinter, Newmark’s Chairman of Global Retail, doesn’t think e-commerce will get anywhere near 30 percent. “E-commerce is just too expensive,” Masinter said. “The cost of customer acquisition and last-mile delivery are far more expensive than opening a store. Bricks and mortar is still the best play to acquire a customer.”

Click here for the full GlobeSt.com article.

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