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E-commerce has shifted sales, competition and work across retail, but it has not simply replaced physical stores. Online sales grew sharply—especially during the pandemic—while store shopping remained significant. The effects vary by country and product category, and online competition is only one of several pressures on traditional retailers.
How has e-commerce affected traditional retail businesses?
Online shopping has changed where customers buy and what retailers must do to reach them. A store can now compete with sellers beyond its local area, while customers can browse and order outside store hours. That wider reach brings additional demands: retailers may need to attract customers online, coordinate inventory across channels and handle delivery or online-order returns.
These changes affect costs as well as sales. The U.S. Bureau of Labor Statistics (BLS) describes online price competition alongside thin margins, customer-acquisition expenses, labor, third-party vendor fees and logistics costs. Physical retailers also face occupancy and store-labor costs; online sellers need a way to fulfill orders and manage delivery. The BLS does not identify a universal cost advantage or break-even point for either channel.
Did online shopping replace store sales?
No. The historical figures below show substantial online growth alongside continuing store purchases. They cover different countries, periods and measures, so they should not be combined into a single market-share trend or treated as current estimates.
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| Measure | What the historical figures show |
|---|---|
| U.S. e-commerce sales | The U.S. Census Bureau reported that e-commerce sales increased 43% year over year, from $571.2 billion in 2019 to $815.4 billion in 2020. This annual increase occurred during the pandemic; it does not show that the same growth rate continued afterward. U.S. Census Bureau |
| Canada’s e-commerce share of retail sales | Statistics Canada reported a 3.9% share in 2019, a 6.9% peak in 2021 and a 6.2% share for January through July 2022. The 2022 figure covers only those seven months. Statistics Canada |
| Great Britain’s average online share | The Office for National Statistics (ONS) reported an average online share of 4.9% in 2008 and 17.9% in 2018. In 2018, more than 80 pence of each pound was spent in stores, excluding non-store retailing. The ONS’s store-sales figure was an estimate because its regular Retail Sales Index did not then publish a store-only series. ONS |
Canada’s series illustrates the pandemic’s role without suggesting it explains the entire shift: the online share fell from its 2021 high but remained above its 2019 level through July 2022. In Great Britain, the older ONS figures show that a higher online share coexisted with substantial store spending. Neither example establishes what the shares are today.
Why did the pandemic accelerate the shift?
Restrictions and changes in shopping behavior pushed more transactions online in 2020. The U.S. Census Bureau’s annual sales figures capture that exceptional period, while Statistics Canada’s later account shows that Canada’s online share eased as in-person shopping resumed but did not return to its earlier level by July 2022.
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The effect differed by retail category. In Canada, restrictions reduced in-store sales and increased online sales in some non-essential categories. When restrictions lifted, in-store sales recovered in some categories and e-commerce eased, while remaining above pre-pandemic levels. Construction- and garden-related retailers also saw large online gains despite being allowed to stay open; increased demand and price pressures contributed. Those category patterns caution against assuming that every retailer experienced the same channel shift.
How did e-commerce affect retail jobs?
Employment shifted across parts of the U.S. retail ecosystem, but the figures describe a historical period, not current job levels. The BLS reported the following changes:
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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errors| U.S. employment measure | Period and reported change |
|---|---|
| Retail trade employment | Rose from 14.4 million in 2010 to 15.8 million in 2017, then contracted by approximately 200,000 jobs from 2017 to 2019. |
| Couriers and messengers | Employment grew 54.4% from 2010 to 2019. |
| Warehousing and storage | Employment grew 86.1% from 2010 to 2019. |
| Retail trade | Employment grew 8.1% from 2010 to 2019. |
The contrast is consistent with more work taking place in delivery and warehousing as online orders grew, while it does not prove that e-commerce alone caused a particular job gain or loss. The BLS also discusses automation, changing consumer preferences, demand for used and discount goods, debt, pandemic effects and thin margins as part of the broader employment picture. Retailers have adopted automation, and some have consolidated or entered bankruptcy amid these pressures.
Is e-commerce replacing brick-and-mortar stores?
Not as a simple, one-way replacement. Stores still offer product discovery, in-person interaction and immediate possession; online channels offer access beyond a store’s opening hours and local catchment. Retailers can also combine the two—for example, by accepting online-order returns at physical locations. The balance depends on the product, shopper behavior and geography.
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Older British evidence offers a useful illustration, not a present-day forecast: in 2018, more than 80 pence of each pound was spent in stores, according to the ONS estimate described above. The same ONS article reported that 83% of adults who had not shopped online in the prior year cited a preference for shopping in stores. That finding concerns this specific group and period; it should not be read as a current estimate of all shoppers’ preferences.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How can traditional retailers adapt?
Retailers have responded by selling online and on mobile devices, investing in logistics platforms and automation, accepting online-order returns in stores, and holding in-store events intended to make visits more compelling. These are documented responses, not guarantees that a particular tactic will raise profit. The BLS notes that some brick-and-mortar stores have tried to improve the shopping experience to give customers a reason to return in person.
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For a small retailer, a sensible choice depends on its own customers, margins and operating capacity. Before expanding a channel or changing fulfillment, assess:
- Customer demand: Where do existing customers look for products, and do they want delivery, pickup or an in-person experience?
- Full costs: Compare customer acquisition, vendor and transaction fees, labor, occupancy, inventory handling and delivery—not just the cost of putting products online.
- Fulfillment and returns: Check whether the business can reliably manage shipping, pickup, returns and inventory across sales channels.
- Product and location: Consider how the category is bought and how local conditions affect store visits and delivery.
- Capacity: Make sure staff, systems and logistics can support the service customers are promised.
The evidence cited here does not establish that a named platform or retail tactic reliably increases profit. A channel decision should be evaluated against the retailer’s actual costs and customer needs.
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How should these figures be interpreted?
- The U.S., Canadian and British measures have different definitions, coverage and observation periods; they are context, not a unified comparison.
- Pandemic-era figures reflect unusual restrictions and changes in behavior. They should not be presented as ordinary year-on-year growth.
- Statistics Canada’s analysis of Canadian e-commerce through July 2022 preceded the transition to the 2022 North American Industry Classification System. For that analysis, online-only establishments were assigned to product-based retail subsectors; foreign legal entities selling online to Canadians were not captured by Canadian business surveys.
- The ONS’s 2018 store-spending comparison was estimated, not a direct store-only series from its regular Retail Sales Index.
- Employment and sales trends do not, by themselves, establish why a particular business closed or how a current retailer should allocate spending.
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