U.S. online retail sales predicted to reach $525 billion in 2018

By

Gabriella Lacombe

Published
Sep 11, 2018

Business advisory firm FTI Consulting released its 2018 U.S. Online Retail Forecast on Tuesday, predicting that U.S. online retail sales will reach $525 billion by the end of this year, marking a 15.9 percent increase over the total $452 billion made in 2017.

The firm further predicted that the country's online retail sales will top $660 billion by 2020 and surpass $1 trillion in 2025, a figure bolstered by the success of companies like Amazon in the online apparel market. These estimates amount to a compound annual growth rate of nearly 10 percent over the next decade.

"Online sales are growing at a respectable rate for many omni-channel retailers in large part because they continue to bear nearly all the associated costs of attracting and accommodating online shoppers, while their store-based sales often languish," said Christa Hart, a senior managing director at FTI Consulting, in a release. "This has made the omni-channel strategy far less lucrative for retailers than once anticipated."

E-commerce now accounts for 13.2 percent of the U.S. retail sales market when excluding auto and gas sales, and 15.7 percent if the supermarket category is also excluded, according to FTI Consulting's analysis. 

Annual online market share gain is peaking at 135 basis points this year, and the forecast model expects online sales growth will begin to decelerate next year.

FTI Consulting's U.S. Online Retail Forecast is a bottom-up logistic growth curve that best fits estimated historical market shares for various product categories since 2000.