Intro United States
Even in turbulent times, the US economy continues to perform. The IMF forecasts that American GDP will grow by 3.7% in 2022, falling to 2.4% in 2023 . Despite concerns about high inflation, consumer spending was still growing at a rate of over 1% when this guide was last updated.
In the early months of 2022, despite a challenging situation on many fronts internationally, US consumer confidence remained positive . According to Moody’s, investment volumes were still rising in the first quarter of 2022 .
After a sharp peak during the worst of the pandemic, US unemployment fell to just 3.6% in March 2022 . Economists usually define “full employment” as occurring when unemployment rates are somewhere between 3% and 4% .
In the United States, e-commerce, fresh from a shot in the arm during the pandemic, also remains robust. In some categories, for instance auto parts or groceries, the annual growth in online orders is between 20% and 30% . And this double-figure growth in online commerce is expected to persist until at least 2026 .
America’s e-commerce market
According to the last annualised figures available, the total e-commerce market in the United States is worth US$1,403 billion . US e-commerce is growing at a rate of 19% a year. An average US e-commerce shopper spends $4,233 a year online. Online sales are 14% of total retail sales. The most popular e-commerce purchase categories are health and beauty (22%), travel (20%) and electrical goods (16%).
In 2021, Amazon’s share of the US e-commerce market was at an all-time high of 57% . Amazon Marketplace, the company’s platform for third-party sellers, captured 25% of the US online market on its own . That still leaves an e-commerce market worth US$800 billion divided up between a broad ecosystem of different merchants; some generalist, others specialising in particular categories. That’s bigger than the e-commerce market in the whole of Western and Central Europe .
Payment methods in the US
The first modern credit card was the Diners Club charge card, founded in 1950 by a group of New York businessmen who, at least according to legend, one evening found themselves unexpectedly short of cash when it came time to pay their restaurant bill.
Given the American pedigree of the payment card, it’s unsurprising that credit cards are the United States‘ payment method of choice, with a 59% market share . Despite this, however, alternative payment methods are also popular in the US.
E-wallets, the most popular US payment alternative, take 30% of the online payment market, bank-transfers 6%, cash 1% and various other payment methods a combined 4% . Visa dominates the card market with a 57% share, Mastercard has 24%, American Express 11%, and other smaller card schemes 8% .
Enabling and limiting factors in US e-commerce
90% of Americans have a fixed-line Internet connection at home and 85% have an Internet-enabled smartphone . According to the Pew Institute, the gap between urban and rural broadband provision is finally being bridged. In 2015, only 56% of rural households had a broadband connection . Today, that figure is 72% . As part of his stimulus plan, President Biden aims to spend $100 billion to give the US affordable, universal and high-speed broadband .
93% of Americans have a bank account and 66% have a credit card . According to White House figures, along with the nearly 7% of unbanked, a further 19% of ‘underbanked’ Americans have a bank account but supplement it with non-traditional financial services like check cashing or payday loans .
The United States ranks 14th out of 160 in the World Bank’s Global Logistical Performance Index. In response to the rapid growth of e-commerce, the carrier industry in the USA has been expanding rapidly. At times, the US Postal Service struggled to cope during the pandemic, with volumes rising by 30% . The post office also announced a rise in the price of sending packages of up to 6.5%, with the exact increase depending on what’s being sent and how .
- Original PPRO research