Early in the COVID-19 pandemic, when many stores closed and consumers shifted their shopping to websites, more than a few observers predicted the pandemic would accelerate growth in online sales and that Amazon.com Inc. would be the big winner from this development.
Now that the dust has settled, we can say that neither proved to be true.
As part of the recently released Top 1000/Top 500 Report from Digital Commerce 360, we examined the ecommerce growth from 2019 through 2023 for the 1,000 largest North America-based retailers and consumer brand manufacturers by global online sales. And there were quite a few surprises.
How did the pandemic affect sales growth for the Top 1000 online retailers?
It is true that the Top 1000’s online sales grew rapidly during the pandemic. In fact, their global ecommerce revenue exceeded $1 trillion in 2023 for the first time, growing 6.9% over 2022.
And for 2019-2023, online sales for the Top 1000 increased at a robust compound annual growth rate of 17.2%, nearly doubling during that period. But online retailing was growing at an even faster rate before COVID hit. The Top 1000 posted an 18.6% compound annual growth rate from 2016-2019, well above the pandemic-era CAGR.
How fast did Amazon grow during the pandemic?
And while Amazon (No. 1 in the Top 1000) did fine during the pandemic, posting a 17.8% CAGR during the five-year period, store-based retailers collectively did even better, growing at a 19.2% annual rate.
As a result, their share of Top 1000 sales increased to 34.0% in 2023 from 31.8%. Amazon’s share also grew, but more modestly, to 38.7% in 2023 from 38.0% in 2019.
Amazon accounted for 7.4% of global online retail sales in 2023. But that global number includes the $2.17 trillion in e-retail sales in China, where Amazon effectively no longer competes. Taking out China, Amazon accounts for 12.2% of online retail sales in the rest of the world. That more accurately reflects its dominance everywhere but China.
Among those losing ground during the pandemic were the 416 web-only Top 1000 retailers not named Amazon. Their share of Top 1000 sales declined to 10.3% in 2023 from 11.8% in 2019.
Growth in online grocery sales
A big reason for the online growth of physical store retailers is the surge in online grocery shopping during the pandemic.
The Food/Beverage category posted the highest compound annual growth rate from 2019-2023 at 26.0%. That mainly benefited traditional supermarkets like Kroger (No. 6 in the Top 1000), which increased its online share of total sales to 10.5% in 2023 from 5.3% in 2019, and Walmart (No.2), which sells the most groceries of any U.S. retailer and increased its ecommerce penetration to 15.4% in 2023 from 7.6% in 2019.
Here are some of the other data highlights from the Digital Commerce 360 Top 1000/Top 500 report:
- Conversion rate for Top 1000 retailers ticked down to just over 2.6% in 2023 from nearly 2.8% in 2022. But that still was ahead of the 2.2% rate in 2019.
- Shoppers 55 and older accounted for only 18.4% of visits to Top 1000 sites in 2023, down from 21.8% in 2022. That suggests that older consumers were especially likely to return to shopping in physical stores as the pandemic eased in 2023.
- Larger retail chains are more likely than smaller ones to offer a mobile app, and store operators with apps are more likely to offer omnichannel services: 33.0% of store-based retailers with a mobile app offered curbside pickup in 2023 versus 13.5% of those without an app, and 87.0% offered in-store pickup of online orders compared to 50.4% of those without an app.
- The Top 1000 accounted for 19.2% of global retail ecommerce sales in 2023, unchanged from a year earlier. Amazon alone accounted for 7.4% of global e-retail in 2023, up from 7.2% in 2022.
What else is in this year’s Top 1000 report?
The Top 1000/Top 500 Report includes all of the following:
- Top 1000 growth by merchant type and merchandise category, comparing 2023 to 2022 and analyzing the five-year period from 2019 to 2023.
- Website traffic trends, broken down by merchant type, merchandise category, gender and age.
- Average order value and conversion rate by merchant type and merchandise category.
- An analysis of winners and losers within the 2024 rankings of the Top 500, North America’s leading retailers by global online sales.
- Mobile traffic and sales for Top 1000 ecommerce sites.
- International shipping methods, payment types and shopping features offered by Top 1000 sites.
- Which online marketplaces Top 1000 retailers sell on, broken out by merchant type and merchandise category.
- An analysis of omnichannel retail services offered, including in-store pickup of online orders, curbside pickup and showing store inventory on retail chain websites.
- How digitally native brands are faring online.
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