Amazon had a spectacular year in 2021, reporting a 22% increase in net sales. But buried in the details there was another number that was almost as startling to those who pay attention to the ecommerce universe — Amazon’s online sales fell by 1% in the fourth quarter. The company’s big earnings boost was driven almost entirely by its hugely profitable Web Services cloud computing division.
To be fair, the decline was against a year-ago quarter when the pandemic was having its maximum impact on bricks-and-mortar commerce. We were all shopping online because we had to.
But Amazon’s decline is not an isolated case. The U.S. Census Bureau reported in February that e-commerce sales as a percentage of all retail sales fell from 13.6% in the fourth quarter of 2020 to 12.9% in 2021.
With growing signs that the pandemic was easing near the end of last year, shoppers began to return to stores, a factor that no doubt contributed to the online slowdown. But there is another factor that may be playing an even bigger role, and one that retailers hoping to cash in on ecommerce should pay attention to.
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