A staggering 77% of US ecommerce retailers expect to see significant growth in 2022. This is according to our latest survey of 600 of the largest ecommerce retailers in the US. This positive outlook is even greater than what we find in Europe — which is undergoing its own ecommerce boom — where 56% of ecommerce businesses expect to see significant growth.
Our research finds this optimism in the US is borne out both in market indicators and in self-reported statistics regarding their intention to invest in lucrative new revenue streams. And while it can be tempting to think of a handful of heavy-hitting American ecommerce brands who might skew results, the pervasiveness of the positive outlook flags a diverse and thriving ecommerce sector in the US and commitment to invest in business model innovation in the US.
US merchants accelerate growth plans
Despite being the world's second-largest ecommerce market, there's still room for substantial growth. Only 7.5% of all retail sales in the US are made online. In recognition of this opportunity, 40% of US ecommerce players say they plan to expand and deepen their presence within their domestic market this year.
The US is the only developed economy to forecast double-digit (16%) ecommerce growth this year. Overall, according to Statista's National Digital Commerce Report, the US ecommerce market will see sales of $875 billion in 2022. This number will reach $1,330 billion by 2025.
The businesses surveyed are not only notable for their collective appetite for investment. They're also notable for their sense that risks and challenges, though present, are reasonably unthreatening.
The US is relatively protected from the energy crisis that's causing consumer costs in Europe to increase and threatening supply chain and shipping costs and efficiencies. Because of this, the OECD forecasts that America's "supply disruptions will gradually ease, facilitating a rebuild of business inventories and stronger consumption growth in the near-term."
The country also benefits from its large manufacturing industry and robust physical and digital infrastructure. So while US brands see inflation as the biggest threat to their growth in the year to come, they see more reassuring signs of health than many other developed economies.
Building new revenue streams
It's not only increased market penetration that US ecommerce businesses are looking forward to. Many plan to unlock new revenue streams by investing in business model innovation. For instance, 45% of US merchants say they're investing in embedded finance. Half say they will be doubling down on subscription models. Businesses view both as key revenue drivers in addition to their existing models.
Personalization and hybridization of shopping are also a top focus for US brands. Both are viewed as dependent upon investment in Artificial Intelligence (AI), Augmented Reality (AR), digital payments and social commerce. Accordingly, 42% of US merchants are investing in AI, VR and AR.
Social commerce is another trending topic; 67% say that social commerce will be one of the sector's hottest trends in 2022, compared with 50% of merchants in Europe who think the same. As a result, just over half of US merchants are also investing in ramping up their social commerce play.
Eyes are also on the future of commerce. Over a third of US merchants are actively preparing to tap into the hybridized 'metaverse' opportunity by adding digital inventory such as NFTs and virtual merchandise to their product offering.
Making payments pay
However, revenue creation is not all about futuristic shopping fora. There's low-hanging fruit to capture as well. Half of US brands report they're investing in new and improved payments technologies and partnerships. Focusing on optimized payments should allow merchants to capture more sales at the digital checkout. It'll also help protect the bottom line from fraud and chargebacks. Although it's interesting to note that optimizing payments doesn't appear to be as pervasive a focus in the US as in Europe, where 68% of merchants are doubling down on their payments optimization this year. Could this be a missed opportunity?
Nevertheless, US merchants that have nailed back-end ecommerce automation are seeking to turn this into additional revenue, too. A quarter of American brands say they plan to white-label and monetize their back-end capabilities to other retailers as headless commerce solutions. In this regard, European businesses are lagging as only 14% plan to turn headless commerce into a source of income.
On the front foot in the marketplace boom
According to McKinsey’s 2021 Global Payments Report, up to 70% of ecommerce will be conducted on marketplace platforms by 2025. And while European merchants express some discomfort with this rising competition, US merchants simply view it as an opportunity to expand their reach.
Indeed 50% of big US non-marketplace brands are planning to sell more products on marketplace platforms in 2022. After all, the US is home to the western world’s original and dominant marketplace. And Amazon is far from the only show in town, as US consumers regularly visit more than 53 big marketplace brands, including Walmart.com, eBay, Target.com, Wayfair and Etsy.
The US is probably right to feel buoyed by their marketplaces advantage since our research shows that over 65% of European consumers prefer to shop on marketplace websites or platforms. The fact that six of Europe’s top 10 most popular marketplaces are US brands makes marketplace presence even more compelling for those retailers looking to expand into new markets on the continent and in the UK.
This is just as well given that half of US ecommerce brands see increased cross-border selling as another significant revenue driver they have planned for 2022.
Learn more about the US ecommerce outlook for 2022
Download our exclusive new report to learn more about the critical trends at play and how leading merchants put digital payments at the center of their growth strategies.