Economy
18 May
US ecommerce sales grow to 15% of retail in first quarter
Ecommerce is on track for another trillion-dollar year, US Commerce Department data shows.

Ecommerce is on track for another trillion-dollar year, US Commerce Department data shows.
US ecommerce sales showed growth to start the year, and gained share of total retail.
The US Department of Commerce reported the following:
Ecommerce sales for the first quarter of 2023 were $272.6 billion, adjusted for seasonal variation.
That’s an increase of 3% from the fourth quarter of 2022.
On an annual basis, ecommerce sales increased 7.8% from the first quarter of 2022.
That’s well above the growth rate of overall retail sales, which were up 3.4% year-over-year.
In all, ecommerce sales in the first quarter accounted for 15.1% of total retail sales.
(Source: US Department of Commerce)
Quick takeaways:
A fast start: Retail sales crossed the $1 trillion mark for the first time in 2022. That momentum is continuing into 2023, as the $272 billion total for the first quarter provides a big head start in once again topping the 12-figure threshold.
Gaining share: While ecommerce’s share of retail spiked north of 16% during the pandemic years, it came back to the 14% range in 2022. The start of 2023 shows that more steady growth is continuing to settle in. It shows that ecommerce is still making gains despite the return to stores, albeit on a more gradual trajectory.
Choosing ecommerce: While retail sales overall are showing more tepid growth to start the year, the data indicates that online shopping continues to be an attractive option. It likely helps that online prices have been falling while overall inflation is continuing to push prices up across the economy. Retailers also have more robust infrastructure for fulfillment and delivery following massive buildouts in the pandemic, particularly at grocers and mass retailers. This combination of price and convenience is proving to lift sales, even as we move squarely into a period when ecommerce is a choice rather than a health and safety necessity.
Ask Instacart answers prompts with personalized recommendations.
A pair of recent launches from Instacart highlight how the grocery ecommerce company is integrating two of the key emerging areas of technology into its offerings: Generative AI and marketplaces.
Let’s take a look:
Instacart is seeking to harness generative AI to create a more personalized shopping experience.
A new tool called Ask Instacart that is launching this week is designed to allow customers to type in questions about specific recipes or general recommendations for an occasion. Embedded in the search bar, Ask Instacart also provides personalized questions to be asked by customers. In addition to specific items, it provides information about food preparation, product attributes and dietary considerations.
For those eying how generative AI will play a role in the shopping experience, Ask Instacart shows how search can be transformed into a place for discovery. Instacart is aiming to provide answers to the more open-ended questions that people would naturally ask, not just simply provide info in response to a question that has one answer. It shared the following sample prompts:
The tool is also showing the way for generative AI to integrate with retail media. Ask Instacart is designed to integrate with a brand's sponsored products campaign, so that the answers to questions that match consumer needs can also provide a way for brands to stand out.
To create the tool, Instacart combined the language understanding of ChatGPT with its own AI models. It added in catalog data from 80,000 retail partner locations around the country, which together have more than one billion shoppable items.
Beyond mission: Ecommerce marketplaces have honed a shopping experience where it’s easy to find what you’re looking for. But if shoppers want to happen upon something they didn’t know they needed, social media or the store is still the best place to visit. Instacart is showing how generative AI can make discovery a marketplace function. It also signals that advertising will come to generative AI by way of retail media. Going forward, the growth of discovery could make retail media more valuable as a tool for advertising that raises brand awareness, not just lower-funnel conversions.
Instacart will power a new virtual convenience store for the grocery chain Aldi.
Aldi Express will feature 2,000 of the most-shopped Aldi items, ranging from prepared food and snacks to grocery staples.
Drawing on 2,100 Aldi locations around the country, items will be delivered as fast as 30 minutes, the companies said.
“Through ALDI Express, we’re making shopping more convenient so you can satisfy a craving or get a missing ingredient in minutes,” said Scott Patton, VP of National Buying at ALDI, in a statement. “Together with Instacart, we’ll continue to find ways to innovate and make the online grocery experience even more effortless and accessible.”
Aldi began offering delivery via Instacart in 2017, and has since expanded services to include pickup as well as alcohol delivery.
Aldi’s marketplace moment? While Aldi previously offered delivery, making the assortment available through a virtual store offers the opportunity to create a marketplace for its goods. With the virtual store, it will more closely resemble DoorDash and Uber Eats, which have been expanding their grocery assortment. With a marketplace, additional revenue opportunities could open up for the grocer, such as advertising through retail media.