This year, e-commerce sales are expected total $373 billion, and that’s seen growing to as much as $500 billion by 2020, according to research from Forrester analyst Sucharita Mulpuru. (That compares with just $100 million 10 years ago.) In addition, the number of U.S. online buyers is expected to grow to 206 million by 2020 from 186 million last year.
Amazon alone captured about 60 percent of the total growth in U.S. online sales in 2015. This growth includes revenue from its third-party marketplace and seller services. Researchers estimate that Amazon’s gross merchandise value stood at $100 billion last year.
In addition to Amazon, the growth in e-commerce sales can be attributed to retailers’ efforts to satisfy customers with personalization, loyalty programs and omnichannel initiatives that improve convenience. The stronger U.S. economy also helped to provide attractive prices and confidence in spending.
Still, the researchers also found challenges on the e-commerce front. The report noted Nordstrom, for example, said it would not increase its investment in technology in 2016 because it wasn’t worth the cost from a revenue standpoint. There are also relatively small barriers to entry for smaller businesses, with platforms such as Magento and Shopify, increasing competition.
Mobile shopping was another sticking point. Although the practice is growing, customers still reported frustration with the process of making purchases on a small device.
And the U.S. dollar and a weaker global economy in general meant that buying from a U.S. online retailer is more expensive for foreign shoppers.
Ultimately, the report advised that e-commerce merchants stand out with products that favor private label over commodities, that they identify areas in which they are failing and consider new ways to monetize.