The United States is the world’s second largest ecommerce market and operates on a truly continental scale; think of it as 50 countries rolled into one. Online sales in 2021 were US$870bn 14.2% up on the pandemic year of 2020 which saw record 31.8% growth.
Online share of total retail sales is 19.1% which suggests that there is plenty of headroom for future growth, particularly as fulfillment networks mature, offering American shoppers reliable two and three day delivery in a country where shipping is expensive and slower than smaller places such as the UK (where online penetration is much higher at 27%). North America is a hotbed of ecommerce tech with Shopify leading the way but being pursued by Magento, WooCommerce and BigCommerce.
The US represents a huge growth opportunity for online retailers and the American consumer is generally receptive to foreign brands. Furthermore, it is a relatively easy country in which to do business. There is a well-developed ecommerce infrastructure and no requirement to incorporate a company to trade. However, you will need to engage representatives to assist with importing goods and management of taxes which can be complex, particularly when your sales exceed $1m.
Before embarking on full market entry, it is worthwhile experimenting in the US by selling goods through marketplaces and sending international parcels from your existing fulfillment center. Customer feedback will help you understand how your products and website can be optimized before locating inventory in US fulfillment centers and scaling up. Once you are ready to go, localizing your website for US customers, priced in dollars with products sized in US or imperial measurements is an obvious starting point, but the real conversion catcher is cheaper and faster delivery along with easy returns. The average website conversion rate in the US is 2.8% which is higher than most European markets but lagging the UK (nation of shoppers!) at 4.4%
With an increase of 11%, the US eCommerce market contributed to the worldwide growth rate of 29% in 2021. Sales are forecast to continue rising at 5% year-on-year which is a post-pandemic slowdown, indicating a degree of saturation, but the market size and language means that over 60% of online retailers consider the US a priority place to do business.
The Big Three of Amazon, Walmart and Apple account for 35% of the ecommerce market alone with the former registering sales of $125bn in 2021. With such market dominance (Walmart is the nearest competitor with $46bn of sales) online retailers must seriously consider the opportunity of trading their products through Amazon. Fulfilmentcrowd can provide Amazon FBA replenishment in addition to fulfilled by merchant (‘FBM’) orders from fulfillment centers across the US.
Fashion is the largest sector with 31% of revenue, followed by electronics and media (21%), toys and hobby (20%) and furniture and homewares (16%).
In the US, 640 parcels were generated every second last year, that’s 55million each day or 61 parcels per person, per annum! Like any market, there is ever-increasing customer expectation of cheap/free and fast delivery. Due to its geography, shipping rates are based on the ‘from’ and ‘to’ locations, so if fulfilling orders from a single location, especially in a remote state, you are likely to be at a disadvantage. With limited choice available, the US Postal Service (‘USPS’) is the dominant player in the ‘small and light’ category, with UPS and Fedex market share of courier delivery being eroded by fast-growing Amazon Logistics.
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