Milestone Comes More Than Two Years Ahead of Pre-Pandemic Expectations
WASHINGTON, July 11, 2022 (GLOBE NEWSWIRE) -- The Retail & Consumer Products practice at FTI Consulting, Inc. (NYSE: FCN) projects U.S. online retail sales will reach $1.07 trillion in 2022 despite increasing concerns among shoppers about the condition of the economy and personal finances.
The milestone, which FTI Consulting projected prior to the COVID-19 pandemic would be reached in 2025, is an increase of 11.7% over 2021 and is in line with the pre-pandemic growth trajectory for the channel, according to FTI Consulting’s 2022 U.S. Online Retail Forecast. The 2022 forecast represents incremental online retail sales of $256 billion above FTI Consulting’s pre-pandemic forecast model — a 31% improvement.
Previously, the pandemic caused approximately $400 billion to move to the e-commerce channel in 2020 and 2021, compared to FTI Consulting’s pre-COVID forecast model. Large omnichannel retailers were the biggest beneficiaries of outsized online sales growth in this period.
Although the pandemic accelerated e-commerce adoption and purchase volumes online, the question now turns to whether these gains will be sustained now that shoppers are returning to stores.
“There is persuasive evidence that COVID-19’s impact on e-commerce shopping will be enduring,” said J.D. Wichser, Leader of the Retail & Consumer Products practice at FTI Consulting. “However, the rocket-like growth of online retail during COVID-19 certainly will moderate. Online sales in the past two years were driven by necessity — shopping from home due to stay-at-home living and work conditions — as well as more discretionary income due to government stimulus, a speedy jobs recovery and increased savings. This will modulate over time, exacerbated by recent inflationary pressure, which is expected to slow total retail spending over the second half of 2022 and is quickly becoming the primary source of stress for consumers, who don’t know how long it will persist.”
E-commerce retail sales saw significant growth between the second quarter of 2020 and the first quarter of 2021. Quarterly online sales growth year-over-year ranged from 45% to 53% during that time, compared to a consistent low- to mid-teen growth rate in the years prior to the pandemic. Online sales growth and market share gains post-COVID will be mostly consistent with pre-pandemic rates.
FTI Consulting’s Retail & Consumer Products practice expects the online channel’s share of U.S. retail sales (excluding auto and gas) to reach 22.1% in 2022, compared to 20.8% in 2021 and 15.2% in 2019. Online market share gains going forward will slightly trail pre-COVID estimates, as the pandemic moved forward e-commerce adopters who would have migrated to the channel in subsequent years.
U.S. online retail sales will surpass $2 trillion by 2030, while total online market share will approach 31% by the end of the decade, compared to 21% at the end of 2021, according to the forecast. This represents a compounded annual growth rate for online sales of nearly 8.5% over the rest of the decade.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 6,900 employees located in 30 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $2.78 billion in revenues during fiscal year 2021. In certain jurisdictions, FTI Consulting’s services are provided through distinct legal entities that are separately capitalized and independently managed. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.
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