eCommerce Grabs 17.9% of Overall Retail Sales in 2024’s Fourth Quarter

The fourth quarter of 2024 capped a strong year for online retail sales, as holiday spending shifted to digital channels, capping a double-digit increase over the third quarter — and a nearly double-digit boost over last year’s levels.

And as the data released Wednesday (Feb. 19) by the Census Bureau in its quarterly retail eCommerce sales report show, digital commerce is growing at multiples of overall spending at retailers, indicating that the great digital shift is a permanent movement.

In the fourth quarter of 2024, U.S. retail eCommerce sales reached an estimated $352.9 billion, representing a 22.1%  increase from the previous quarter (on a seasonally unadjusted basis). Compared to the same quarter in 2023, eCommerce sales grew by 9.3% , while overall retail sales rose by 4.5%.

Online sales accounted for 17.9% of total retail sales during the fourth quarter, and the yearlong reading of 16.1%, as reflected in the chart below, represents a gain from 15.3% seen in 2023.

For the full year 2024, eCommerce sales were estimated at $1.19 trillion, reflecting an 8.1% increase from 2023. Total retail sales for the year grew by 2.8% compared to the previous year.

We’re at the peak of the past several years — and the data shows a jump from the 9.7% percentage contribution of eCommerce to retail sales seen before the pandemic.

The building materials and garden equipment sector rebounded, growing 5.8% in 2024 after a 1.9% decline the previous year. The fourth quarter alone saw a 10.6% surge, a notable turnaround from the same periods in 2023 and 2022, which recorded declines. This sector also reached a record high for eCommerce sales, accounting for 14.2% of total sales, up from 13% over the past three years.

In contrast, eCommerce sales of furnishing products struggled throughout the year, totaling just $15.3 billion (in September 2022 dollars), an 8.2% drop compared to 2023.

The clothing, accessories and general merchandise sector ended the year with a 10.6% increase over 2023, driven by a strong fourth quarter in which sales rose 10.7% year over year. This growth was largely fueled by the general merchandise category, which posted a 16.5% annual increase.

Food and beverage eCommerce sales climbed 8.3% in 2024, marking the highest growth since the pandemic, with total sales reaching $34.6 billion. In real terms (adjusted to September 2022 dollars), this represents a 5.2% increase from 2023.

Where to From Here?

But there may be some signs that there’ll be some volatility in the browsing and the clicking of online buy buttons. The jump in fourth quarter eCommerce sales has seen a bit of digesting, in terms of a pullback in spending. As we reported last week, January’s retail sales, overall, declined more than had been expected via consensus estimates.

The January data indicated that retail sales were down 0.9% from December. Non-store retailers, which account for 18% of the monthly total estimate, saw a steeper decline in the first month of 2025, inching down 1.9% according to advance estimates.  Year over year, growth was still in the cards in January, as the percentage change in non-store retailer sales showed a 3.8% gain — but that’s a significant slowdown from the high single-digit year-over-year growth rates that have been a hallmark of retail sales done online. The monthly downturn is the steepest in nearly four years.

There’s evidence that discretionary spending took a bit of a pause last month, as month-over-month purchases of clothing and accessories was 1.2% lower, and spending at sporting goods, electronics and other hobby-related establishments slipped 4.6%.

There are perhaps some warning signals coming from Etsy’s results, which also were reported by PYMNTS. As gross merchandise volumes slid, active buyers slipped 2.6%, to 89.6 million; new buyers dropped 17.6%, to 6.9 million; repeat buyers decreased 2.5%, to 36.1 million and habitual buyers fell 9.5%, to 6.4 million.