US e-commerce extends its lead in consumer spending

US online retail ended 2025 with another clear gain over the wider retail market, reinforcing the extent to which e-commerce is taking a larger share of everyday consumer spending.

US e-commerce and consumer spending

New figures from the US Census Bureau show that retail e-commerce sales reached $316.1 billion in the Q4 of 2025 on a seasonally adjusted basis, up 1.7% from the previous quarter.

By contrast, total retail sales rose by just 0.4% over the same period.

The gap matters. It suggests that digital commerce is no longer simply a growth category within retail, but an increasingly central channel through which consumers research, compare and complete purchases.

In the fourth quarter, e-commerce accounted for 16.6% of total US retail sales on an adjusted basis, underlining the continued structural shift towards online channels.

Financially Pressured Consumers

The expansion of online retail is being driven by more than convenience alone.

Consumer finances remain under pressure, and that is shaping purchasing behaviour in ways that favour digital channels.

Online shopping offers a practical advantage for households looking to control spending, chiefly because it makes price comparison easier and promotions more visible.

Research cited in the data shows that 30% of consumers made an online retail purchase in the previous 30 days, representing a 13% year-on-year increase. Over the same period, participation in in-store retail fell by six percentage points.

That points to a meaningful reallocation of consumer activity away from physical stores and towards digital platforms.

This is particularly significant for the payments industry. As more consumers shop online to manage stretched budgets, merchants and payment providers are under greater pressure to deliver frictionless checkout, transparent pricing and a wider choice of payment methods.

Payment Preferences Are Evolving 

As e-commerce grows, payment behaviour is shifting with it. Digital wallets continue to gain ground, especially among younger consumers who are more comfortable with app-based and embedded payment experiences.

Recent findings show that 15% of consumers used a digital wallet for a retail purchase in November, up from 11% earlier in the year. Among Generation Z, usage was far higher, at 36%.

That trend has important implications for issuers, acquirers and merchants alike. Online retail growth increasingly goes hand in hand with demand for faster, simpler and more seamless payment journeys.

Businesses that fail to support preferred digital payment options risk adding friction at the very point consumers expect convenience.

E-commerce Becomes Retail’s Centre of Gravity

On a year-on-year basis, Q4 e-commerce sales rose 5.3%, compared with 2.7% growth in total retail sales.

For full-year 2025, e-commerce sales climbed to $1.23 trillion, rising 5.4%, while total retail sales increased 3.5%.

The direction of travel is unmistakable. Retail overall is still growing, but online commerce is expanding faster and becoming more influential.

For merchants, the challenge is no longer whether to invest in digital commerce and payments, but how quickly they can adapt to a consumer economy whose centre of gravity is moving steadily online.