That’s also the third-highest quarterly penetration since the department started tracking ecommerce sales. The highest to date was last quarter — Q4 2023 at 23.4%. Before that, the highest ecommerce penetration in a quarter was 22.6% in Q4 2020, the first year of the COVID-19 pandemic.

“Since Q1 2020, this is the fastest Q1 growth we’ve seen for ecommerce, and ecommerce growth accounted for a huge share of total retail growth for the period (52.8%),” said James Risley, research data manager and senior analyst at Digital Commerce 360. “That means price-conscious shoppers are using ecommerce to find the best offers and shifting buying to online amid inflationary worries.”

Breaking down Q1 2024 ecommerce and total sales

At the same time, total retail sales in Q1 2024 reached an estimated $1.820 trillion, according to Commerce Department data. Excluding spending in segments that don’t typically sell online, that comes out to $1.205 trillion, according to Digital Commerce 360 analysis.

Although ecommerce sales declined in Q1 2024 compared to Q4 2023, Risley said that’s the norm. They fell 17% quarter over quarter, and total retail sales dropped 12.7% in the same period.

“Q1 sales are almost always lower than the Q4 of the previous year because of holiday sales,” he said.

Year over year, though, Q1 sales growth was an inverted image of the quarter-over-quarter decline. Whereas ecommerce sales fell at a faster rate than total sales from Q4 2023 to Q1 2024, they grew at a faster rate than total sales in Q1 2024 compared to Q1 2023.

Ecommerce sales grew year over year at more than twice the rate of total sales in Q1 2024 — 8.5% and 3.4%, respectively.

How is ecommerce penetration calculated? 

Including all retail and food-service sales, U.S. ecommerce accounted for 15.9% of total sales in Q1 2024, according to the Commerce Department. Unadjusted figures show U.S. ecommerce sales represented 15.6% of total sales, the Commerce Department said. It estimates total U.S. ecommerce sales in Q1 2024 reached $268.1 billion.

Digital Commerce 360 studies non-seasonally adjusted commerce department data and excludes spending in segments that don’t typically sell online. These segments include:

• Restaurants
• Bars
• Automobile dealers
• Gas stations
• Fuel dealers

U.S. ecommerce penetration reflects the share of dollars consumers could potentially spend online.

The Commerce Department defines ecommerce sales as the sales of goods and services where an order is placed by the buyer or price and terms of sales are negotiated over:

• Internet
• Extranet
• Electronic Data Interchange (EDI) network
• Electronic mail
• Other online system

Payment may or may not be made online. The Commerce Department publishes estimates it adjusts for seasonal variation and holiday and trading-day differences, but not for price changes.

Percentage changes may not align exactly with dollar figures due to rounding. Here’s last quarter’s update.

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Rohit Goyal, CEO, inriver

Goyal, who took over as PIM vendor inriver’s chief executive last week, said in an interview that he sees significant potential in AI for enhancing both productivity and revenue.

One area where AI is already having a significant impact on digital content, he said, is through enhanced productivity, such as in multilingual digital content managers’ ability to generate copies of product content in multiple languages from a master copy “by clicking a button.”

“The fact that you can generate local copies and start to edit, that’s huge,” he said.

Goyal added that, beyond productivity, AI holds out promise for helping to generate more revenue through more personalized content targeted at segments of buyers.

Asking AI to help boost conversions

“Can you generate different types of content? The answer is yes,” he said. “But I think the entire industry is figuring out how to systematize that beyond a lab experiment or an innovation team experiment at a brand or retailer.

“There’s a ton of experimenting going on to say, ‘What if we ask AI to generate content that is targeted to a certain segment of buyers and push it down the channel?’ Will that help increase conversion or engagement?”

He added that the industry is heading in that direction. “There are green shoots … I think AI can help,” he said. “But it’s not clear that it’s ready to scale yet.”

Inriver, however, is already deploying and upgrading AI applications in other ways to enhance its technology platform. For example, inriver Inspire, which integrates the ability of ChatGPT with the inriver PIM, now offers AI-driven batch editing to streamline content management, plus a custom prompt editor to maximize relevance for diverse audiences.

In addition, Goyal said inriver’s technology platform is based on an “extensible and flexible” framework that lets companies extend their customized product information to all B2B and B2C channels and customer touchpoints.

He noted that users can build technology connectors and adapters and do customization work independently of inriver’s own ongoing platform upgrades. “So, the SaaS platform keeps innovating without disrupting the extensions and connectors around it,” he said.

Goyal added that inriver’s new Augmenta development framework frees up companies to use their preferred programming language instead of relying on a specific framework that inriver had previously required. “Now, you can use your favorite programming language to build customizations and extensions,” he said.

Inriver’s recently announced platform upgrades include:

• A suite of application programming interfaces (APIs) for standardizing inbound integrations for onboarding data to inriver’s PIM.
• Product data governance tools for maintaining compliance with new regulations by tracking product generations and using unique QR codes for product labeling and ecommerce.
• Enhanced content distribution via APIs through inriver Syndicate Plus to retailers and marketplaces.
• An automated configurable workflow system for product lifecycle management from onboarding product data and PIM management to merchandising operations.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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In Q4 2023, U.S. ecommerce sales accounted for 23.5% — or more than a fifth — of total retail sales. Meanwhile, total retail sales in Q4 reached $1.380 trillion, Digital Commerce 360 analysis revealed.

2023’s quarterly ecommerce sales growth has been “remarkably steady,” said James Risley, research data manager and senior analyst at Digital Commerce 360. Each quarter in 2023, U.S. ecommerce made up between a third and half of total retail sales growth.

“Q4 caps off a steady year for U.S. ecommerce growth as post-pandemic buying trends normalize,” Risley said. “With consumers frustrated and confused by the economic outlook, spending growth remained low. However, online shopping deals and holiday spending helped keep ecommerce growth up to finish off the year strong.”

US ecommerce sales continue to grow in Q4 2023

As was the case for each quarter of 2023, ecommerce sales in the U.S. grew at a faster rate than total sales in Q4.

In Q4 2023, U.S. online sales grew at more than double the rate of total sales. Ecommerce sales grew 7.2% year over year, whereas total retail grew 3.5%.

Compared to both the prior quarter and the prior year’s Q4, ecommerce sales slowed in Q4 2023. In Q3 2023, U.S. ecommerce sales grew 7.8%. That’s closer to the growth rate in Q4 2022 (7.7%).

Q4 2023 marks the slowest fourth-quarter ecommerce sales growth in the U.S. since 2008, when Q4 online sales decreased 6.1% year over year as a result of the Great Recession. Although Q4 2023 ecommerce sales growth is still positive, it is the slowest (positive) fourth-quarter growth to date, according to Digital Commerce 360 analysis of U.S. Department of Commerce data. The department’s ecommerce data goes back to the year 2000.

On the other hand, total retail sales growth increased quarter over quarter to 3.5% from 3.2% in Q3 2023. That 3.5% growth is still slower than the previous Q3’s growth (5.0% in 2022).

Along with Q4, 2023 as a whole reached a new record for U.S. ecommerce sales. In addition, the online penetration of total sales also marked a new high.

How is ecommerce penetration calculated? 

Including all retail and food-service sales, U.S. ecommerce accounted for 15.6% of total sales in Q4 2023, according to the Commerce Department. Unadjusted figures show U.S. ecommerce sales represented 17.1% of total sales, the Commerce Department said. It estimates total U.S. ecommerce sales for the full year surpassed $1.118 trillion.

Digital Commerce 360 studies non-seasonally adjusted commerce department data and excludes spending in segments that don’t typically sell online. These segments include:

• Restaurants
• Bars
• Automobile dealers
• Gas stations
• Fuel dealers

U.S. ecommerce penetration reflects the share of dollars consumers could potentially spend online.

The Commerce Department defines ecommerce sales as the sales of goods and services where an order is placed by the buyer or price and terms of sales are negotiated over:

• Internet
• Extranet
• Electronic Data Interchange (EDI) network
• Electronic mail
• Other online system

Payment may or may not be made online. The Commerce Department publishes estimates it adjusts for seasonal variation and holiday and trading-day differences, but not for price changes.

Percentage changes may not align exactly with dollar figures due to rounding. Here’s last quarter’s update.

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2023’s 22.0% marked the largest U.S. ecommerce sales penetration to date, according to Digital Commerce 360 analysis of U.S. Department of Commerce data. The department’s ecommerce data goes back to the year 2000.

At the same time, U.S. ecommerce grew 7.6% in 2023 and total sales grew 3.8%. That’s a sharp contrast from the pandemic-induced U.S. ecommerce boom, which led online sales to grow at a rate of 42.8% over 2019, whereas total retail sales in 2020 grew 7.8%.

Editor’s note: An earlier version of this chart has been updated to reflect 22.0% penetration for U.S. ecommerce in 2023.

How much did US ecommerce sales grow?

U.S. ecommerce sales grew to about $1.119 trillion in 2023 from $1.040 trillion in 2022 (7.6% growth). Meanwhile, total retail sales grew to about $5.088 trillion in 2023 from about $4.904 trillion in 2022 (3.8%).

U.S. ecommerce has also grown every quarter going back to Q2 2009, when it decreased 3.9% over Q2 2008. Similarly, total retail sales in the U.S. have grown every quarter going back to 2009, according to a Digital Commerce 360 analysis of commerce department data. Total retail sales decreased every quarter that year, as well as in Q4 2008, a result of the Great Recession.

Outside of the Great Recession, total U.S. retail sales have not declined going back at least through 1993, the extent to which Digital Commerce 360 analysis is available.

“Ecommerce growth continued to slow this year amid an overall slower economy, but it accounted for nearly half the total retail growth for the country,” said James Risley, research data manager and senior analyst at Digital Commerce 360. “That’s a return to pre-pandemic levels of contribution compared to a much smaller contribution in 2021 and 2022. Overall, the ecommerce picture is returning to our pre-COVID understanding of retail.”

2024 State of American Ecommerce Report

This report covers how the leading U.S.-based online retailers, and their respective categories are currently performing in ecommerce and provides projections through 2025. 

View Details

How is ecommerce penetration calculated? 

U.S. ecommerce sales accounted for 15.4% of total sales in 2023, and 14.7% of total sales in 2022, according to the Commerce Department.

Digital Commerce 360 studies non-seasonally adjusted commerce department data and excludes spending in segments that don’t typically sell online. These segments include:

• Restaurants
• Bars
• Automobile dealers
• Gas stations
• Fuel dealers

U.S. ecommerce penetration reflects the share of dollars consumers could potentially spend online.

The commerce department defines ecommerce sales as the sales of goods and services where an order is placed by the buyer or price and terms of sales are negotiated over:

• Internet
• Extranet
• Electronic Data Interchange (EDI) network
• Electronic mail
• Other online system

Payment may or may not be made online. The Commerce Department publishes estimates it adjusts for seasonal variation and holiday and trading-day differences, but not for price changes.

Percentage changes may not align exactly with dollar figures due to rounding. Here’s last year’s update.

Do you rank in our databases? 

Submit your data and we’ll see where you fit in our next ranking update.

Sign up

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The Chinese app bought air time for three commercials during the game and two after. Super Bowl advertising is some of the most expensive of the year. For Super Bowl LVIII, advertisers paid between $6.5 million and $7 million for a 30-second commercial, CNN reported. Individual rates vary, however, depending on when an ad airs during the game and if an individual advertiser purchases multiple commercial spots. A Temu spokesperson declined to comment on how much the retailer spent.

PDD Holdings owns Temu, which launched in 2022 and isn’t yet reflected in Digital Commerce 360 rankings of the largest online retailers. PDD also owns Pinduoduo, which operates an app-only marketplace for Chinese consumers. Because it doesn’t operate an ecommerce website, Pinduoduo is not included in Digital Commerce 360’s Asia Database.

Rise of Temu and its Super Bowl ad buys

Temu first gained the spotlight one year ago during the Super Bowl in 2023. 

Last year, the retailer bought two Super Bowl commercials, its first introduction to many U.S. consumers. PDD had launched Temu just a few months earlier, in September 2022.

“Through the largest stage possible, we want to share with our consumers that they can shop with a sense of freedom because of the price we offer,” PDD said in a statement at the time.

That strategy seems to be working. Temu was the most downloaded app in the U.S. in 2023, and the eighth-most downloaded app in the world, according to analytics firm Sensor Tower. The retailer reached 51 million monthly active users in January, a nearly 300% year-over-year increase.

In May, Temu surpassed rival Shein’s monthly U.S. sales for the first time. In September, a report from Earnest Analytics found that Temu is taking market share from Dollar General and Dollar Tree. Temu is now the No. 4 most-visited retail website in the U.S., behind only Amazon, Walmart, and eBay, The Wall Street Journal reported based on Insider Intelligence research.

Shein Group Ltd. is No. 36 in the Asia Database. Dollar General ranks No. 725 in the 2023 Digital Commerce 360 Top 1000. The Top 1000 is a ranking of North America’s leading retailers by online sales. Amazon ranks No. 1, and Walmart ranks No. 2.

Temu’s ad strategy

Temu is spending heavily on advertising, prioritizing customer acquisition. The retailer outspent all advertisers except Amazon on Facebook in Q4 of 2023, Sensor Tower said. Temu grew its ad spending on Facebook 318%, and spending on Instagram grew 101%  year over year in the quarter, the firm said. 

J.P. Morgan estimates Temu will spend $3 billion on marketing in 2024.

Editor’s note: This article has been updated to reflect Temu’s ownership. PDD Holdings owns Temu, as well as its sister company Pinduoduo.

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Laura Ramos, vice president and principal analyst, Forrester Research

That’s the advice from Forrester Research in the report, “Predictions 2024: B2B Marketing, Sales, and Product,” by vice president and principal analyst Laura Ramos and other Forrester analysts.

Forrester advises that B2B marketing, sales and product teams “face a turbulent year ahead, full of partner-centered growth and productivity ups as well as demand, technology and regulatory/legal downs.”

It asserts that generative AI may broadly impact all teams across marketing, sales and product, “with a mix of both success and failures” throughout 2024.

But Forrester adds: “Teams that double down on customer analysis and understanding, address buyer preferences, and enrich collaboration with [channel] partners will find the ride exhilarating.”

GenAI tops the B2B challenges

Topping off the challenges ahead is generative AI, which Forrester predicts will sift through customer data for insights that will direct one in five new product launches. But while GenAI will help make 2024 a bumper year for new products, Forrester warns that “thinly customized GenAI content will degrade purchase experience for 70%” of B2B buyers by failing “to demonstrate an understanding of their organization’s business conditions or needs.”

To deepen understanding of B2B buyers, Forrester says “B2B marketers should invest in fresh buyer and customer persona interviews and use the transcripts to guide AI-generated content personalization efforts,” adding: “We anticipate that one-third or fewer will do so, but those who do will see their investment in AI-generated content pay off.

Among its other 2024 predictions, Forrester says half of B2B companies will boost partner ecosystem technology investment. It suggests those companies consider collaboration in such areas as GenAI, co-marketing and partner-led marketplaces.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Thanksgiving Day ecommerce sales set a new record of $5.6 billion in online spending, according to analysis from Adobe Analytics. That sets the stage for the rest of the week, including Black Friday and Cyber Monday. 

Salesforce says U.S. Thanksgiving online sales reached $7.5 billion, and global sales totaled $31.7 billion, each growing 1% over Salesforce’s figures from last year. 

“Cyber Week is off to a strong start as consumers took advantage of strong discounts and continued their shopping plans, virtually,” said Vivek Pandya, lead analyst, Adobe Digital Insights.

Thanksgiving ecommerce results

The $5.6 billion consumers spent online on Thanksgiving according to Adobe is a 5.5% increase over Thanksgiving 2022. The results are more impressive with a longer perspective. Online spending nearly doubled since 2017, when consumers spent $2.87 billion online shopping on Thanksgiving.

Toys were a top shopping category for consumers getting a jump start on holiday presents. Toy sales were up 182% over an average day in October, per Adobe. Discounts on toys reached 28%. Disney Little People, Uno Show No Mercy, Marvel figures, Barbie dolls, and stuffed animals were the most popular toys among Thanksgiving shoppers.

Jewelry sales were also strong, up 126%, along with apparel (124%), electronics (113%) and personal care products (67%). Electronics and computers recorded some of the highest discounts, of 27% and 22%, respectively. Gaming consoles including the Playstation 5, Xbox Series X and Nintendo Switch were all popular. Games for the consoles were also top sellers, Adobe recorded. Call of Duty: Modern Warfare III, Super Mario Bros. Wonder, Super Mario RPG, Hogwarts Legacy, and Mortal Kombat 1 were the top games. Robot vacuums, bluetooth speakers, tablets, workout apparel, and holiday decor rounded out the top seller list. 

The average order value on U.S. Thanksgiving online orders was $119, according to Salesforce. 

Mobile sales ruled Thanksgiving ecommerce

Mobile sales reached an all-time Thanksgiving high this year, according to Adobe Analytics. 59% of all Thanksgiving online sales were made on mobile devices, accounting for $3.3 billion in spending, an increase of 14% year over year. 

Both mobile sales and online sales overall peaked between 9 p.m. and midnight PT, Adobe said.

Online traffic to retail websites grew 6% in the U.S. year over year, according to Salesforce. 82% of that traffic came from mobile devices. Mobile wallet usage also grew, up 44% year over year. Apple Pay drove much of that growth, increasing 47% over 2022. 

Social media ads also drove sales through mobile traffic, according to Salesforce. Social media accounted for 13% of U.S. mobile traffic referrals to retailers.

“Mobile traffic and sales are soaring as people are on the go once again this holiday weekend. Consumers are embracing mobile wallets to break down friction between discovering on social and purchasing on mobile,” Rob Garf, vice president and general manager of retail at Salesforce, said in a statement.

Black Friday predictions

Adobe forecasts Black Friday will have the best deals on TVs, with discounts as deep as 22%. Apparel, appliances, sporting goods, toys and other categories will also be discounted, though Adobe says steeper discounts will come later for these types of purchases.

Black Friday is projected to account for $9.6 billion in online sales, according to Adobe forecasts. That would be a 5.7% increase year over year. 

Meanwhile, Salesforce predicts that BOPIS (buy online, pick up in store) sales will increase on Black Friday as consumers look to avoid shopping in crowded stores. 

Ecommerce fraud prevention vendor Signifyd says holiday sales are 6% higher than this time last year, as of mid-day on Black Friday. 

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Amazon is betting that Prime members will spend heavily on deeply discounted items. It looks to lure web shoppers in with deals that range from seasonal decor starting as low as $6 to invitation-only deals like 60% off 50-inch smart TVs and savings on brand names such as up to 50% off Sony products and 30% off Lego items.

But exactly what Prime members are looking to purchase and how much they will spend will vary widely by age, income, and other factors, says new research from market research company Numerator and industry survey.

Amazon is No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database. It ranks the 100 largest such marketplaces by 2023 third-party GMV.

Amazon Big Deal Days closely precede holiday sales period

Nearly one-third of all consumers are expected to shop online during Amazon Prime Big Deal Days. While those won’t be as big as the 37% of consumers that shopped and bought this summer during Amazon Prime days, Prime Deal Days will “bring a significant boost to ecommerce sales in general, “with the first day of the sale potentially surpassing Cyber Monday in online shopping,” Numerator says.

Other research firms also suggest that while Amazon Prime Big Deal Days will generate big business for Amazon and other big chain retailers this week, many budget-conscious shoppers will choose to shop later and closer to online retailing’s biggest days: Black Friday and Cyber Monday.

Nearly half (44%) of consumers who plan on shopping during the 2023 winter holiday season say they plan to do so during a preseason sales event like Amazon Prime Big Deal Days, says research firm Mintel.

Shoppers remain budget-conscious

But Black Friday and Cyber Monday remain popular (45%) as consumers’ budget-focused mindset continues, says Mintel.

“Over a quarter (28%) of winter holiday shoppers agree that it is even more critical to shop on Black Friday or Cyber Monday because of inflation/rising prices,” Mintel says. “When asked how inflation impacts their spending, 42% of winter holiday shoppers say they purchase fewer gifts, while a quarter (24%) say they switch to lower-priced retailers.”

Even with Amazon and other retailers pushing big deals and deep discounts this week, consumers may remain more budget-minded than in earlier years, Mintel says. Three in five (59%) consumers who plan to do winter holiday shopping in 2023 say they want to spend the least amount of money possible, says Mintel.

“Consumers will participate more in preseason shopping sales, such as Amazon Prime Day, to take advantage of the deals and discounts,” says Mintel retail and ecommerce analyst Brittany Steiger. “They remain value-conscious and look to spend as little as possible.”

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The online marketplace announced two new features, Buy with Prime Assist, and Buy with Prime Cart.

Buy with Prime Assist allows sellers to offer Amazon customer support for no additional charge. The service gives customers access to a chat feature with Amazon customer service representatives who can answer questions about shipping, current orders and returns. 

Buy with Prime Cart is another feature designed to make off-site purchasing experiences more like the experience on Amazon.com. Previously, Buy with Prime functioned similarly to Amazon’s Buy Now feature, Peter Larsen, Amazon vice president of Buy with Prime and multi-channel fulfillment, said in a blog post. Now, customers can buy multiple items at once, like a traditional online cart, he said.

What is Buy with Prime?

Amazon first launched the tool in April 2022. It allowed retailers to sell products also listed on Amazon from their own websites. Customers checked out using Amazon’s payment system and received orders using the ecommerce giant’s fulfillment network.

Retailers pay Amazon a fee to use the service, which Amazon has not disclosed.

There were about 167 million Prime Members who were eligible to check out using Buy with Prime as of March 2023, according to Consumer Intelligence Research Partners, a Chicago firm that tracks Prime members via consumer surveys.

Why is Amazon expanding Buy with Prime now?

Amazon relies heavily on third-party sellers on its marketplace, which ranks No. 3 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the top 100 online marketplaces. A majority (63.7%) of GMV in 2022 came from third-party sellers, a figure that’s increasing year over year. 

“As Amazon loses some of its position as the search engine for shopping, it is using other tactics to gain intelligence and maintain market share,” Digital Commerce 360 senior analyst James Risley says.

“Shopify is definitely a threat in terms of providing an alternative for sellers,” Risley says. “More than half of sales on Amazon are from third-party sellers, and if they turn to Shopify instead of Amazon or favor their own Shopify site, Amazon loses out.”

Notably, Amazon recently allowed Shopify merchants to offer Buy with Prime on their Shopify websites.

“Amazon partnering with Shopify is really a test for both of them. Shopify can use the Amazon payment options as a way to make it easier for merchants to get out of the strict Amazon.com ecosystem while not abandoning all of its benefits. Amazon gets to pull a potential competitor a little closer and keep it from threatening its position too much,” Risley says.

Amazon promises seller benefits

The online marketplace shared new data indicating that sellers who use Buy with Prime are better positioned than those that don’t.

Three out of four Buy with Prime purchasers, on average, are new customers to the brand, Amazon said. The tool also led to a 25% increase in conversion, on average, the online marketplace said. 

Other tools from Amazon also have positive impacts on sales. Retailers who added reviews from Amazon to their websites saw an average of 38% in conversion growth. Merchants using Buy with Prime cart reported 15% increase in units sold, on average, after adding the feature. 

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