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US The State of the eCommerce Industry Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the The State of the eCommerce Industry market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

This report examines the state of the ecommerce industry and includes an overview of key innovations and what will influence ecommerce in 2019, including categories most/least purchased and what consumers value when shopping online.

This report builds on the analysis presented in Mintel’s library of ecommerce reports, including but not limited to: Online Shopping – US, May 2018; Buying Online: Understanding Why Consumers Sometimes Don’t – US, July 2018; and The Path to Online Purchase: Understanding the Consumer – US, December 2018.

Key points included

  • eCommerce shows no sign of slowing down
  • More products draw in more online shoppers
  • Free shipping and returns have become table stakes

Expert analysis from a specialist in the field

Written by Matt Lindner, a leading analyst in the eCommerce sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The eCommerce industry is reaching a pivotal point heading into 2019. Online sales are growing faster than overall retail sales as online shopping becomes more routine. Given the level of interest in online shopping as well as the competition for shoppers’ attention and walletshare, online retailers must be agile when it comes to meeting potential shoppers where they are and removing any potential barriers to an online purchase. Building trust, offering unique products that stand out, and ensuring an easy delivery and returns process are three key pillars to succeeding in eCommerce in 2019. Matt Lindner
Senior eCommerce Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Scope
      • Executive Summary

        • Overview
          • eCommerce shows no sign of slowing down
            • Free shipping and returns have become table stakes
              • More products draw in more online shoppers
                • Maintain an active online presence to build trust
                  • Consumables are set to gain ground in 2019 and beyond
                    • Social media is essential to selling to younger online shoppers
                      • What it means
                      • What We Learned in 2018

                        • Online product discovery isn’t always intentional
                          • Shipping costs can lose – and win back – an online sale
                            • Shoppers have a largely transactional relationship with Amazon
                              • Online hasn’t replicated the experience of seeing something in person
                                • Shoppers value post-purchase communication from retailers
                                  • User generated content builds trust
                                  • The Industry – What You Need to Know

                                    • eCommerce is growing much faster than overall retail
                                      • Consumables present an opportunity
                                        • The paths to purchase can start anywhere on any device
                                        • Industry Size and Forecast

                                          • Online sales forecast to approach $900 billion by 2023
                                            • Figure 1: Total US online retail sales and fan chart forecast with best- and worst-case scenarios, at current prices, 2013-23
                                            • Figure 2: Total US online retail sales and forecast, at current prices, 2013-23
                                          • eCommerce growth outpaces total retail sales growth
                                            • Figure 3: Estimated quarterly total US retail sales growth vs online sales growth, by quarter, Q3 2017-Q3 2018
                                            • Figure 4: Estimated quarterly total US retail sales vs online sales, Q3 2017-Q3 2018
                                        • Analyst Perspective

                                          • Everyday essentials have room for growth
                                              • Figure 5: How consumers buy products (by category) – Any online, November 2018
                                            • AR to become more of a reality
                                              • Increasingly connected consumers drive the industry
                                                • Connected consumers result in savvier online shoppers
                                                  • Blurring lines between in-store and online creates opportunities
                                                    • Don’t discount the power of rural America
                                                    • Key Trends – What You Need to Know

                                                      • Amazon and Walmart lead the way
                                                        • Prime Day inspires others to get in on the action
                                                          • Social media creates more shopping moments
                                                            • Physical stores will serve more online shoppers
                                                              • Retailers will partner up to drive online – and offline – business
                                                              • Industry Influencers

                                                                • Amazon
                                                                    • Figure 6: Online shopping frequency, by retailer/website type, April 2018
                                                                  • Walmart
                                                                    • Google
                                                                      • Facebook and Pinterest
                                                                      • Online Shopping Events

                                                                          • Singles’ Day gains ground in the US
                                                                              • Figure 7: American Apparel Singles’ Day marketing email, November 2018
                                                                            • Black Friday and Cyber Monday generate record setting sales
                                                                                • Figure 8: Shoe Carnival Cyber Monday marketing email, November 2018
                                                                              • Prime Day gives Amazon and others a boost
                                                                                  • Figure 9: Amazon Prime Day marketing email, July 2018
                                                                                • Wayfair rolls out Way Day
                                                                                  • Figure 10: Wayfair Way Day promotional email, April 2018
                                                                              • Biggest Impacts of 2018

                                                                                • Social shopping
                                                                                  • Instagram
                                                                                    • Pinterest
                                                                                      • Snapchat
                                                                                        • Prime Wardrobe
                                                                                          • Joining forces
                                                                                            • Amazon and Kohl’s
                                                                                              • Kroger and Walgreens
                                                                                                • L’Oreal buys ModiFace
                                                                                                • What Will Impact in 2019

                                                                                                  • Physical stores will play a greater role
                                                                                                    • Retailers will seek out more partnerships and acquisitions
                                                                                                      • One-click ordering will be more accessible
                                                                                                        • Retailers will focus more on promotional sales “events”
                                                                                                          • Online grocery will continue to expand
                                                                                                            • Packaging will become more efficient
                                                                                                              • Social media will create more purchasing moments
                                                                                                                • Take a picture, find a product, make a purchase
                                                                                                                  • Shoppers will have more voice-activated shopping options
                                                                                                                  • The Consumer – What You Need to Know

                                                                                                                    • Current behaviors
                                                                                                                      • Brands need to have extensive digital footprints to build trust
                                                                                                                        • Cost and trust are top-of-mind
                                                                                                                          • Small screens provide opportunities for product discovery
                                                                                                                            • Apps lag far behind mobile websites in popularity
                                                                                                                              • In-store pickup and faster delivery can set online retailers apart
                                                                                                                                • Attitudes toward promotions and personalization
                                                                                                                                  • Younger online shoppers check out new retailers during online sales
                                                                                                                                    • Too many promotional emails can be a turnoff
                                                                                                                                      • Shoppers would rather their experience be personalized based on their own history
                                                                                                                                        • Future behaviors
                                                                                                                                          • Shopping online for everyday essentials is catching on
                                                                                                                                            • Give shoppers more control over when they receive orders
                                                                                                                                            • The eCommerce Shopper

                                                                                                                                              • Almost everyone shops online
                                                                                                                                                • Figure 11: Online shopping frequency, November 2018
                                                                                                                                              • Online shopping is a habit for many
                                                                                                                                                  • Figure 12: Change in online shopping compared to last year, by online shopping frequency, November 2018
                                                                                                                                                • Who is shopping more online compared to last year
                                                                                                                                                  • Figure 13: Change in online shopping compared to last year, by key demographics, November 2018
                                                                                                                                                  • Figure 14: Change in online shopping compared to last year, by annual household income, November 2018
                                                                                                                                              • Attitudes toward Shopping Online

                                                                                                                                                • Ease: online shoppers feel like they can find what they’re looking for
                                                                                                                                                    • Figure 15: Ease of finding products online, by generations, November 2018
                                                                                                                                                  • Shopping preferences: brand variety draws in more online shoppers
                                                                                                                                                    • Figure 16: Online retailer shopping preference, November 2018
                                                                                                                                                  • Building trust: smaller retailers must be easy to find online
                                                                                                                                                      • Figure 17: Trust in brands and online retailers, November 2018
                                                                                                                                                  • What Online Shoppers Value

                                                                                                                                                    • Online shoppers are cost conscious
                                                                                                                                                        • Figure 18: Factors most important when shopping online, November 2018
                                                                                                                                                      • Trust is almost as important as easy returns
                                                                                                                                                        • Older shoppers are more likely to prioritize product selection
                                                                                                                                                          • Figure 19: Factors most important when shopping online – Product selection vs reviews, by generation, November 2018
                                                                                                                                                        • A human connection is not as important to online shoppers
                                                                                                                                                          • Figure 20: Factors least important when shopping online, November 2018
                                                                                                                                                      • The Impact of Mobile

                                                                                                                                                        • Most people own smartphones and many use them to shop online
                                                                                                                                                          • Figure 21: Devices used to browse and buy online, October 2018
                                                                                                                                                        • Retail smartphone apps haven’t caught on with most shoppers
                                                                                                                                                          • Figure 22: Attitudes toward and usage of smartphones for online shopping, November 2018
                                                                                                                                                        • A good smartphone shopping experience is key to reaching younger women
                                                                                                                                                          • Figure 23: Smartphone shopping activities, by gender and age, November 2018
                                                                                                                                                        • Parents are more likely to use mobile apps while in-store
                                                                                                                                                            • Figure 24: In-store mobile app usage, by parental status, November 2018
                                                                                                                                                          • iGens and Millennials are key to turning the tide when it comes to using mobile apps
                                                                                                                                                              • Figure 25: Mobile app shopping preference, by generation, November 2018
                                                                                                                                                          • Attitudes toward Promotional Activity

                                                                                                                                                            • Familiarity beats the unknown during major online sales
                                                                                                                                                              • Figure 26: Attitudes toward online promotional activity, November 2018
                                                                                                                                                            • iGens and Millennials are more open to checking out new retailers during sales
                                                                                                                                                              • Figure 27: Attitudes toward online promotional activity – Select items, by generation, November 2018
                                                                                                                                                            • Beware of too much of a good thing with email marketing
                                                                                                                                                                • Figure 28: Attitudes toward marketing emails, November 2018
                                                                                                                                                              • Products in subject lines are key to reaching older online shoppers
                                                                                                                                                                • Figure 29: Attitudes toward email subject lines – Product vs sale, by generation November 2018
                                                                                                                                                            • Attitudes toward Personalization

                                                                                                                                                              • Personalize online based on a shopper’s history, not their name
                                                                                                                                                                  • Figure 30: Desire to be shown products based on past behaviors, by household income, November 2018
                                                                                                                                                                • Most shoppers don’t like being addressed by name in promotional emails
                                                                                                                                                                  • Figure 31: Attitudes toward personalization in marketing emails, by gender and age, November 2018
                                                                                                                                                                • Introduce products that similar shoppers have bought to appeal to younger women
                                                                                                                                                                  • Figure 32: Desire to be shown products based on what similar people have purchased/looked at, by gender and age, November 2018
                                                                                                                                                                • Show dads what people who live near them are buying and looking at
                                                                                                                                                                  • Figure 33: Desire to be shown products based on what nearby people have purchased/looked at, by gender and parental status, November 2018
                                                                                                                                                              • Last-mile Considerations

                                                                                                                                                                • Free returns and free shipping are must-haves
                                                                                                                                                                  • Figure 34: Important factors when deciding whether or not to buy online, November 2018
                                                                                                                                                                • Combine free and fast shipping and returns for broadest appeal
                                                                                                                                                                  • Figure 35: TURF analysis – Attitudes toward delivery options, November 2018
                                                                                                                                                                • Delivery speed: younger online shoppers don’t want to wait
                                                                                                                                                                  • Figure 36: Importance of delivery speed in online purchasing decisions, by generation, November 2018
                                                                                                                                                                • Pickup: dads are more likely to prioritize online order pickup
                                                                                                                                                                  • Figure 37: Importance of delivery speed in online purchasing decisions, by gender and parental status, November 2018
                                                                                                                                                                • Shoppers in less-populated areas interested in more options
                                                                                                                                                                  • Figure 38: Importance of same day delivery and curbside pickup when deciding to buy online, by area, November 2018
                                                                                                                                                                • Don’t forget the packaging
                                                                                                                                                                    • Figure 39: Packaging concerns as a deterrent to buying online, November 2018
                                                                                                                                                                • Future Behaviors

                                                                                                                                                                  • Parents expect to shop more online
                                                                                                                                                                    • Figure 40: Future online shopping expectations, by gender and parental status, November 2018
                                                                                                                                                                  • Frequent online shoppers want more control over deliveries
                                                                                                                                                                    • Figure 41: Future online order delivery expectations, by change in online shopping compared to last year, November 2018
                                                                                                                                                                  • Millennials are more likely to expect AR features
                                                                                                                                                                    • Figure 42: Future online shopping expectations, by generation, November 2018
                                                                                                                                                                • Appendix – Data Sources and Abbreviations

                                                                                                                                                                  • Data sources
                                                                                                                                                                    • Sales data
                                                                                                                                                                      • Fan chart forecast
                                                                                                                                                                        • Consumer survey data
                                                                                                                                                                          • Direct marketing creative
                                                                                                                                                                            • Abbreviations and terms
                                                                                                                                                                              • Abbreviations
                                                                                                                                                                                • Terms
                                                                                                                                                                                  • TURF analysis – Methodology
                                                                                                                                                                                    • Figure 43: Table – TURF analysis – Attitudes toward delivery options, November 2018
                                                                                                                                                                                • Appendix – The Industry

                                                                                                                                                                                    • Figure 44: Total US online retail sales and forecast, at inflation-adjusted prices, 2013-23