How quickly is U.S. e-commerce expected to grow in the near future? In an earlier post, we looked at total U.S. e-commerce sales for the period 2000 through 2009. As illustrated at the end of that post, it is clear that growth in e-commerce plummeted from 2007 through 2009. Total U.S. sales via e-commerce in 2010 reached $166.5 billion, growing 15.28 percent over the previous year. As impressive as that is, it represents only 4.28 percent of total U.S. retail sales. While e-commerce as a percent of U.S. retail sales continues to grow, as illustrated in the table below, it accounts for less than five percent of total U.S. retail sales.
In a recent article co-written with Dr. Godwin C. Ariguzo (@ariguzo), we predict that by the end of 2013, total U.S. e-commerce sales will reach a level of $254.7 billion. This represents a compound annual growth rate (CAGR) of 52.94 percent for the period 2010-2013. Overall, the CAGR for the period 2000-2013 is projected to be 18.65 percent, which is less than the CAGR for the 2000-2010 period (19.70 percent). The table below presents the quarterly growth of U.S. e-commerce since 2000 and the projected growth per quarter through 2013. The projected growth was calculated using a Holt-Winters technique in time series analysis.
Graphically, the projected annual growth for U.S. E-Commerce sales looks like this:
How does this compare to the overall growth rate in U.S. e-commerce reported in the earlier post? For consistency, the same summary tables were developed for this investigation (but are not included in the article with Dr. Ariguzo referenced above). The table below presents the actual growth rate through 2010 and the projected growth rate through 2013.
The recovery in U.S. e-commerce growth from 2009 to 2010 is impressive. We project the trend to continue through the end of 2011 and then to begin to decline slightly. The actual and projected growth rates are presented graphically below.
Please keep in mind that the figures presented are predictions based on a linear trend line obtained via time series analysis. As with any projections of future sales based on the history of past sales, the results are speculative at best. In addition, we believe that the rapid diffusion and adoption of mobile commerce (including via iPads and Tablets) may lead to higher than projected growth rates.
At what rate do you think U.S. e-commerce will grow over the next two years?
White, D. Steven and Godwin C. Ariguzo (2011), “A Time Series Analysis of U.S. E-Commerce Sales“, Review of Business Research, Volume 11, Number 4, pp. 134-14o.
The full paper may be downloaded from the Social Science Research Network (SSRN) by clicking on the hyperlink above.