May 30, 2002, 12:00 AM

Online sales grew 19.3% in Q1 to $9.85 billion, Commerce Department reports

Q1 online retail sales were second highest--trailing only Q4 2001--since the Commerce Department started tracking e-commerce sales in Q4 1999. E-retail now accounts for 1.3% of retail sales, up from 1.1% a year ago.

Total online retail sales reached $9.85 billion in the first quarter, up 19.3% from Q1 a year ago, the Census Bureau of the Department of Commerce reported today. The Census Bureau estimates total retail sales for the first quarter at $743.8 billion, up 2.7% from the same period a year ago. E-retail sales equaled 1.3% of all retail sales, up from 1.1% a year ago.

The Census Bureau’s figures are widely held to be the benchmark of online sales because it bases its numbers on a survey of 11,000 retailers. By comparison, other major tracking companies reported numbers not far off from the Census Bureau. ComScore Networks Inc. reported in April that Q1 online retail sales were $10.07 billion. BizRate.com Inc. also reported in April that online retail sales were $11.6 billion. ComScore and BizRate derive their numbers from monitoring consumer behavior.

Q1 e-commerce sales fell 11.9% from Q4 2001 while total retail sales decreased 13.1%. The drop-off from Q4 2000 to Q1 2001 was 12.7%. Apart from Q4 2001, the first quarter numbers this year are the highest quarterly online sales since the Census Bureau started tracking online sales Q4 1999. Online sales in that quarter totaled $5.48 billion, 0.7% of all retail sales

The numbers don`t tell the whole story about the web`s role in retailing, though, says Daniel E. Hess, vice president of comScore. "The whole other extraordinary success story that doesn`t turn up in these numbers is the channel blurring that`s taking place," he says. "For every dollar that`s spent on the web, there are several others that are being spent in the store that have been influenced by the web."

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