This has been an unexpected banner year for online retail sales, mostly attributable to the impacts of business shutdowns and social-distancing practices on the way Americans shop in this year of pandemic. Nobody saw it coming or anticipated its effect on the consumer economy.
Whether or not they wanted to, most Americans became more frequent online shoppers in 2020. This development has profound implications for the retail sector, not just in 2020 but for the decade ahead, as most shoppers won't likely go back to their old spending ways in a post-COVID world.
Consequently, we have revised our online retail forecast model, which previously had gains in annual online market share peaking in 2019 and gradually subsiding thereafter. We now expect online retail sales growth will increase by 25% for the year, nearly double our previous estimate. Our revised forecast model expects online retail sales to reach $748 billion in 2020 compared to $598 billion last year and our previous 2020 forecast of $677 billion-a $71 billion windfall attributable to COVID-19.
Online market share of total retail sales will increase by 350 basis points in 2020, the equivalent of approximately 2.5 years of market share gains in one year, and 220 basis points above our previous estimate. We anticipate that online retail market share will reach 27% by 2025 and 33% by 2030, some 320-440 basis points above our previous market share estimates.
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