The holiday season really is the season to shop online. While it’s a long-established fact that retail sales move with the seasons, typically spiking in the holiday quarter, e-commerce sales follow the same pattern to an even larger extent. According to data from the U.S. Census Bureau, the share of e-commerce sales in total retail sales is significantly higher in the fourth quarter of each year than it is for the remaining nine months. In Q4 2023, for example, e-commerce sales accounted for 17.1 percent of total retail sales in the U.S. - an all-time record and significantly higher than the average share of 14.7 percent for the remaining three quarters of the year.
Our chart also illustrates the growing importance of e-commerce overall, with the share of e-commerce sales in total retail sales growing from less than 5 percent in 2010 to more than 15 percent last year. The Covid-19 pandemic has accelerated this shift, as online sales uncharacteristically spiked in Q2 2020 when people were forced to stay at home. In subsequent years, things normalized somewhat and now, four years later, it seems like we're back on the pre-pandemic trend. Interestingly the holiday season spike in online shopping’s share of total spending is less pronounced now than it was in pre-pandemic times. In 2021, 2022 and 2023 the fourth quarter e-commerce share was 13, 16 and 16 percent above the Q1-Q3 average, respectively. Prior to the pandemic, the difference was typically 25 to 30 percent, indicating that e-commerce now plays a larger role throughout the year.
