A new report from FTI Consulting, Inc. released Tuesday projects U.S. online retail sales will surpass $1 trillion in 2027, compared to the expected $445 billion in 2017, representing a compounded annual growth rate of 9 percent over the next decade.
“The impact of accelerating online sales growth has been evident in the past two years, with elevated levels of retail bankruptcies and announced store closures amid a non-recessionary environment,” said Christa Hart, a senior managing director in the retail and consumer products practice at FTI Consulting.
If online sales double by 2023, Hart said stores will have to contend with the prospect of losing the same amount of sales to the online channel in the next six years as they did in the previous 16. “The frustration for many retailers is that even building a complex and expensive omnichannel enterprise has just kept them in the game instead of leading to renewed profitability,” she added.
U.S. online retail sales grew by 15.5% year-over-year through the second quarter of 2017. The online channel now accounts for 12.2% of total U.S. retail sales, excluding auto and gas. FTI expects that number to increase to 22 percent by 2027.
According to FTI, the online channel accounted for nearly 50 percent of total retail sales growth in the past year. With most consumers already shopping online, the advisory group expects future growth in online shopping will come from shoppers using the medium to purchase more frequently and across more product categories than they do currently.