ECommerce Sales By Category and Merchant Size

Goals

To provide eCommerce sales by category and merchant size in the United States to gain insight into eCommerce industry trends.

Early Findings

eCommerce Sales Measurement Methodologies

  • We are including a brief discussion of eCommerce measurement methodologies to provide context to the data we provide below. When available, we will provide information on any details behind the category and retailer sales measurement reporting methodologies.
  • A 2018 Profitero (a leading eCommerce analytics provider) survey indicated that measurement of eCommerce brand performance was a top challenge.
  • Top measurement methodologies include ePOS data provided by large research firms (e.g., NPD or Nielsen) or eCommerce retailers themselves. ePos data offers data granularity, breadth, and accuracy, and would be considered a "platinum standard" for understanding retailer and category size, growth, and share.
  • Panel analytics, often based on consumer scanning of e-receipts, are useful in addressing total market size, growth, and brand share. Panel data is considered a top data source for a "total market" view, as a helpful source for a broad view of online sales and share.
  • Survey data, which is reliant on consumer purchasing claims, may also be used as a source of information to measure eCommerce sales.
  • Panel and survey data often include proprietary projection methodologies that are useful for a broader read of the market, with some level accuracy traded off for enhanced breadth of measurement.
  • Survey information was observed as a data source in several resources we uncovered, including a quarterly eCommerce market projection provided by Census.gov. This resource corroborates the US eCommerce market size of approximately $700 billion ($681,774: $153,274+$156,581+ $160,414 + $211,505) based on the most recent four quarters (Q3 2019-Q2 2020). The market size excludes online travel services, financial brokers and dealers, and ticket sales agencies, and the total market is projected based on those retailers who completed the survey (typically 67% of the 10,500 retail firms).
  • An analysis of total eCommerce sales from global business advisory firm, FTI Consulting is an example of the use of survey data and proprietary projection methodology as a source for understanding total market and category size. The company projected the 2020 eCommerce market at $645 billion in 2020 (prior to COVID-19).

Category Breakdown

  • Statista, which provides 2020 sales for 5 eCommerce categories (totaling $410, 891 in 2020) includes fashion ($126,549), electronics/media ($88,972), toys, hobby, DIY ($81,016), furniture and appliances ($67,975) and food/personal Care ($47,459). Statista appears to leverage survey data with a proprietary forecasting methodology to derive these sales estimates. While the category size is lower than the $700 million provided from multiple sources, it appears that this is mainly due to their "bottoms up" approach to estimating total category (individual category size, with the total representing only those 5 categories).
  • As directional support to the Statista estimate for fashion (apparel), FTI consulting notes in their eCommerce analysis by retail category that apparel and accessories represent the largest online category in terms of revenue, though sales growth is beginning to slow. They also note Wayfair has been key in driving online sales of furniture and home accessories.
  • eMarketer, which provides a perspective on online sales for several eCommerce categories as a percentage of total sales for that category, includes several additional categories, which likely account for the remainder of the category sales: "books, music and video", "office equipment and supplies", automotive, and "other." The information is not provided in the form of a share of online sales however, and will require additional analysis (total size of the category in the US) to derive share. However, it does provide an indication that several of the leading Statista-cited categories (computers/electronics, fashion/apparel, toys, and furniture) are consistently prominent in this analysis. eMarketer does not provide its methodology details in public sources uncovered.
  • Digital Commerce 360 places automotive eCommerce sales at approximately $14.6 billion in 2018. Their methodology appears to be based on surveys, dealership metrics, and analysis of online sales from companies such as Tesla.
  • In a separate report, Statista notes that books, music and video revenue is expected to reach $28.0 billion by 2024.
  • COVID-19 impacted online sales for several categories, which demonstrated significant growth in April 2020, including grocery (+110%), electronics (58%), and books (100%).
  • There was limited information specifically around category market shares or sales available in the public domain. However, assuming a category size of $700 billion, we can leverage Statista sales data to approximate shares of several of the leading categories. Fashion/Apparel would own an 18% share ($126,549 billion/$700 billion), computers/electronics 12.7% share ($88,972 billion/$700 billion), toys/hobbies, DIY an 11.6% share ($81,016 billion/$700 billion), furniture and appliances 9.7% ($67,975 billion/$700 billion), and food/personal care 6.8% ($47,459/$700 billion).
  • Automotive share would reach 2% ($14.0 billion/$700 billion), while books, music, and videos (excluding downloads) would represent approximately 4% ($28 billion/$700 billion) of the eCommerce market.
  • The above categories account for 64.8% (18+12.7+11.6+9.7+6.8+2+4) of online sales, indicating the remainder (35.2%) would be accounted for by office equipment and supplies and "other" categories (which might include items such as sporting goods, gifts and flowers, garden supplies, and pet products).
  • For a slightly different perspective, Pipecandy (eCommerce research and analytics), provides an analysis of the percent of companies in various eCommerce sectors. This will not line up precisely with revenue share but may offer another data point for comparison.

Retailer Breakdown

  • According to eMarketer, the top online retailers in the US in 2020 (as of February 2020) were Amazon (38.7% share), Walmart (5.8%), eBay (4.7%), Apple (3.7%), Home Depot (1.7%), Best Buy (1.5%), Target (1.2%), Costco (1.2%), Wayfair (1.5%), and Macy's (1.1%). These large eCommerce marketplaces and businesses account for $427.7 billion (61.1%) of category revenue, but fewer than 1% of the eCommerce companies in the US.
  • Target's most recent eCommerce sales are reported to be $8.34 billion, representing a 1.2% share of the category, resulting in a confirming eCommerce category size of $695 billion ($8.34 billion/.012).
  • FTI provides a similar share estimate for Amazon, 40.6%, broken down by direct sales (14.9%) and third party sales (25.9%).
  • Pipecandy offers some additional perspective on the distribution of eCommerce companies by revenue, noting that 67% of eCommerce companies in the US make less than $1MM in revenue, just under 20% make between $1MM and $5MM, while less than 1% make more than $500 million in revenue. Those that make between $5 million and $500 million in revenue account for the remaining eCommerce companies in the US.
  • It may be possible to make some assumptions around average revenue for the companies in each revenue tier to derive approximate revenue for companies shares for the various tiers in the eCommerce space (which account for the remaining one-third of market share); however, we were limited by time in this early research and were unable to determine if triangulation was possible.

Summary of Early Findings

  • In this initial research, we uncovered data across multiple sources (eMarketer, FTI, Statista, Digital Commerce 360) which allowed us to provide approximate revenue shares of leading eCommerce categories. Most of the share information in these sources was based on survey data, public information (census.gov eCommerce predictions, which is itself based on survey and its own modeling) and proprietary forecasting and estimation of shares. Nothing pre-compiled was available (and the information was somewhat fragmented overall), though we were able to identify leading categories that were consistent across all data sources (apparel, computers, furniture).
  • In terms of revenue by retailers, we used a recent source (eMarketer, February 2020), verified with separate, additional information that directionally verified the shares provided.
  • While we did not uncover information (precompiled or otherwise) that dissected the revenue shares of the remaining third of the US eCommerce retailers, we did find one source (Pipecandy) that provided a distribution of the number of companies in various revenue ranges. However, we did not have time to develop an approximate method (which could potentially include assigning an average or approximate revenue range to the companies in each tier) to translate this information into revenue breakdown by merchant size.
  • Finally, given the time constraints and the research required to uncover multiple public sources to determine information availability for the business questions, we were unable to provide results in table format in early research.
  • In addition to this public search, we scanned our proprietary research database of over 1 million sources and were unable to find any specific research reports that address your goals. While there were a number of reports relating to the eCommerce market as a whole (most being global reports), it did not appear that breakdowns by category or merchant tier were readily available in paid reporting either. This may suggest research of this type generally flows through proprietary, custom research channels.
  • Our recommendations are based on what we were able to uncover and analyze in this early research.

Proposed next steps:

You need to be the project owner to select a next step.