Chart: Retail Apocalypse 2017

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

The steady rise of online retail sales should have surprised no one.

Back in 2000, less than 1% of retail sales came from e-commerce. However, online sales have climbed each and every year since then, even through the Great Recession. By 2009, e-commerce made up about 4.0% of total retail sales, and today the latest number we have is 8.3%.

Here’s another knowledge bomb: it’s going to keep growing for the foreseeable future. Huge surprise, right?

Signs of a Reckoning

Retailers eye their competition relentlessly, and the sector also has notoriously thin margins.

The big retailers must have seen the “retail apocalypse” coming. The question is: what did they do about it?

Well, companies like Sears failed the shift to digital altogether – in fact, it is even widely speculated that the former behemoth might file for bankruptcy later this year.

The majority of other companies, on the other

Amazon.com has reshaped American commerce in just two decades. But how much of the online shopping empire’s success owes to innovation and entrepreneurial genius, and how much of it stems from cheating the system?

Without the loopholes it uses to avoid state sales taxes, new research shows, Amazon loses a substantial portion of its customers’ spending to alternative retailers. In five states that closed the sales tax loopholes that make Amazon’s prices more competitive than what in-state retailers can charge, the site’s sales fell by 9.5 percent.

For large purchases where the sales tax advantage would be most pronounced, the researchers found an even steeper drop in Amazon spending. When states close their online sales tax loopholes, “consumers decrease their spending by 15.5% on purchases larger than $150, and by 23.8% on purchases equal to or larger than $300.” These findings come from a National Bureau of Economic Research (NBER) working paper which examined data on millions of shop