E-Commerce as a Share of Retail Sales: The Normalization Era (2025 Update)

Remco Livain -

The Current Numbers: E-Commerce in 2025

Let’s get straight to the point. As of Q1 2025, e-commerce accounts for ~16.2% of total retail sales in the U.S., according to U.S. Census Bureau data. This marks a stable upward trajectory from 14.9% at the end of 2022. Year-over-year growth remains healthy, with online retail expanding at 8.9% in 2023 and expected to hit $1.39 trillion in total sales this year.

Globally, that number is higher. E-commerce now represents roughly 20–21% of total retail sales worldwide — driven by fast adoption in China, South Korea, and increasingly, parts of Europe and Latin America. By 2028, we’re expected to cross the 22.5% threshold globally.

From Surge to Stability: What’s Changed?

Back in 2020, the pandemic sent e-commerce skyrocketing. Grocery delivery, online furniture shopping, telemedicine, even virtual fitness exploded overnight. For months, it seemed like physical retail would never recover.

But instead of collapsing, brick-and-mortar retail adapted. The big shift wasn’t a replacement — it was integration.

  • BOPIS (Buy Online, Pick Up In Store) became a mainstay.
  • Curbside pickup is no longer a novelty.
  • Brands started using physical stores as logistics hubs, blending showroom and warehouse models.

E-commerce didn’t plateau because people stopped shopping online. It plateaued because physical retail evolved to meet digital expectations.

Marketplaces Dominate, But Competition Grows

In the U.S., Amazon still holds over 40% of the online retail market. Walmart trails with ~$94 billion in e-commerce revenue, but is closing the gap through aggressive marketplace expansion.

New players like Temu and Shein are shaking up the industry — especially among younger and budget-conscious demographics. Their rapid rise has contributed to over 15,000 U.S. store closures projected for 2025, according to a report by CoreSight Research.

But even as the marketplace wars heat up, the pie is growing. More sellers. More buyers. Higher expectations.

So Why Does It Matter?

Understanding the percentage of retail sales that are online isn’t just a trivia stat — it’s strategic insight.

  • If you’re running a D2C brand: You now operate in a hybrid landscape. Conversion may start online, but trust is often built offline.
  • If you’re in B2B: Your clients expect consumer-grade speed and service. The Amazon effect has fully arrived.
  • If you’re in retail real estate: Your tenants are not dying. They’re adapting — and you need to, too.

The Path Forward: It’s Not Either/Or

E-commerce won’t swallow retail whole. It will keep growing — gradually, steadily — but not exponentially. That’s not bad news. That’s the sign of a maturing, essential channel.

The winners won’t be the ones who go “all-in” on digital. The winners will be those who connect online and offline into one fluid customer experience.

That’s the real takeaway. The game isn’t e-commerce vs. retail anymore. It’s experience vs. friction.

Sources

For context

I originally wrote about this trend when it felt like we were watching history shift in real time. Now, in 2025, it’s clear: we’re not at the end of the retail story — just a more complex chapter. If you’re building a brand today, ignore the hype. Focus on the blend. That’s where the magic happens.

– Remco Livain

PS: Want to discuss your own e-commerce or retail strategy? Connect with me on LinkedIn or book a quick meeting here.