Economy Watch: E-Commerce Continues Its Uphill Trek

The pace of e-commerce sales growth has steadily picked up in recent years, but will the retail channel face eventually face a plateau?

The U.S. Census Bureau reported this week that U.S. e-commerce retail sales were up 2.1 percent in the fourth quarter of 2015, compared with the third quarter. Compared with Q4 2014, e-commerce sales were up a sizable 14.7 percent. However, year-over-year, overall retail sales were only up 1.3 percent in Q4 2015.

Total e-commercial sales for all of 2015 were about $341.7 billion, an increase of 14.6 percent compared with the entirety of 2014. E-commerce sales in 2015 accounted for 7.3 percent of all retail sales; in 2014, it accounted for 6.4 percent of all retail sales, reported the Census Bureau.

The increases both quarter-over-quarter and year-over-year in e-commerce were completely in line with long-term trends. Sales via that retail channel have grown consistently without pause, even with the recession, over the last 10 years. In the mid-2000s, e-commerce accounted for about 3 percent of retail sales. By 2012, it broke 5 percent.

The question now is when, and whether, there will be a plateau in e-commerce sales. The increasing ease with which consumers can buy using a variety of platforms would suggest that such a leveling off might not happen soon. Some retail categories have been hurt by the trend more than others, such as electronics stores, music stores and book stores—all things easily available online. The continued success of, for example, Apple as a retailer, however, means that Internet sales aren’t necessarily total killers of particular retail categories.