The slowing of eCommerce in 2022 is a fact, but the scope of that drop in online sales as reported by government sources just doesn’t add up.
According to the new report “Digital Economy Payments: The Ascent of Digital Wallets,” the latest in PYMNTS’ long-running study series on the rise of the digital connected economy and its payments proclivities, we see a wide variance in eCommerce totals, depending on the source.
As the study states, “Total consumer spending on retail products was more than $6 trillion in the 12 months before October 2022, with eCommerce representing $1.3 trillion in annual sales. Based on a combined analysis of data from PYMNTS’ Quarterly Payments Survey and the Bureau of Economic Analysis (BEA), eCommerce represents 21.7% of annual retail sales in Q4 2022, up from 21.3% in Q3.”
That disagrees with the U.S. Census Bureau’s conclusion that eCommerce now commands a 14.8% share of U.S. retail sales — just 1 percentage point above pre-pandemic estimates.
For category specifics, PYMNTS data found that 12% of grocery spending happened online in 2022, totaling $182 billion.
In non-grocery retail spend, eCommerce represents 25% of the total, coming in at a colossal $1.1 trillion.
For the millions doing this online shopping, the February report focuses primarily on the rise in digital wallet usage.
The study states that “PayPal represents 13.5% of consumers’ total online retail spend but just 2.7% of in-store transactions as of the close of Q4 2022. Apple Pay reached 4.3% of the total amount spent on online purchases, and Google Pay took 2.5%.”
Moving to in-store settings, digital wallet usage drops precipitously — representing 50% fewer in-store transactions — at 1.9% and 0.8%, respectively.
Similarly, we found that the use of various buy now, pay later (BNPL) solutions is more prevalent online than in-store (2.8% compared to 0.4%).
Going back to grocery, Apple Pay captured 4.7% of spending and Google Pay 1.9% in online purchases. “These online shares had increased from 3.1% and 1.4%, respectively, in Q3 2022, while in-store usage barely changed,” per the study. “PayPal usage for online grocery purchases was 9.2%, decreasing from 10.7% in Q3 2022. In-store PayPal usage for grocery purchases also decreased, falling from 2% in Q3 2022 to 1.9%.”
Get the Study: Digital Economy Payments: The Ascent of Digital Wallets
