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Quantifying the recently changed relationship between e-commerce and traditional retail sales

by Michael Sivak, Sivak Applied Research.

In a recent article, I have shown that, in the United States, despite a large increase in e-commerce retail sales, traditional retail sales (adjusted for population and inflation) have stayed virtually unchanged from 2015 through 2019. Specifically, during that time period, the annual increases in e-commerce sales averaged about 12%, while the annual changes in traditional sales hovered near zero. However, that time period ended before the current pandemic, which started in March 2020. Therefore, the present analysis examined the changes in e-commerce and traditional retail sales during the first two quarters of 2020.

Of specific interest in this study were changes from 2019 to 2020 in e-commerce and traditional retail sales per capita, adjusted for inflation. The raw data for the calculations were seasonally adjusted total and e-commerce retail sales (from the U.S. Census Bureau), population (also from the U.S. Census Bureau), and Consumer Price Index (from the U.S. Bureau of Labor Statistics).

The table below shows the year-to-year changes for the first two quarters of 2020 in both e-commerce and traditional retail sales per capita, with both adjusted for inflation.

Quarter of 2020 Change from year ago
E-commerce sales Traditional sales
1st +11.9% -1.9%
2nd +43.3% -10.1%

The main findings are as follows:

  • During the first quarter of 2020 (which includes only one month with the pandemic—March), e-commerce sales increased by 11.9%, while traditional sales decreased by 1.9%.

  • During the second quarter of 2020, the discrepancy in the changes in the two types of sales increased. Specifically, e-commerce sales increased by 43.3%, while traditional sales decreased by 10.1%. (During this quarter, e-commerce sales represented 16.1% of total sales.)

Michael Sivak is the managing director of Sivak Applied Research and the former director of Sustainable Worldwide Transportation at the University of Michigan.


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