According to eMarketer's latest forecast on U.S. retail sales, total retail sales — including auto and fuel sales — will drop by 10.5% to $4.9 trillion this year, but e-commerce is expected to increase by 18%.
On the brick-and-mortar side, retail sales will decline 14% to $4.2 trillion in 2020, and it could take up to five years for physical store sales to return to pre-pandemic levels. E-commerce sales are expected to reach $710 billion this year, but it will not alleviate the losses left behind by physical store closures, per the report.
Amazon is expected to lead the way in online sales, taking up 38% of market share, eMarketer said, with Walmart (5.8%), eBay (4.5%), Apple (3.5%) and Home Depot (1.9%) following behind.
The eMarketer report adds further context to how the COVID-19 pandemic has shifted consumer spending online. After several retailers initially pulled back on their digital channels early on during the outbreak, online sales have increased for many, but it neither replaces in-store product discovery nor is it a seamless shopping experience.
Other reports have recorded e-commerce growth, too. Online grocery shopping increased by 110%, and online electronics sales jumped by 58% in April, according to an Adobe report. But data from the U.S. Department of Commerce shows that retail sales in key sectors tracked by Retail Dive dropped by 16% year over year.
Though Amazon has a sizable lead over other retailers, eMarketer projected that Walmart will replace eBay as the second e-commerce retailer in the U.S. for the first time. Andrew Lipsman, eMarketer principal analyst at Insider Intelligence, said in the report that online grocery shopping and click-and-collect services — which have existed for some time — have made significant strides, jumping "three or four years into the future in just three or four months."
"Amazon will increase its e-commerce market share to 38% and extend its reign of dominance," Lipsman said in a statement. "But big-box retailers are leveraging their click-and-collect models to accelerate their e-commerce businesses. This will push Walmart into the No. 2 position for the first time. Along with Target, Best Buy, The Home Depot and Costco Wholesale, Walmart is expected to grow e-commerce sales more than 35% in 2020."