In its second-largest acquisition, Amazon buys the company for $970 million.
Online sales top $50 billion in the first quarter.
E-commerce has surpassed yet another milestone as consumers increasingly shift more of their shopping behavior from stores to the web. U.S. e-commerce sales totaled $50.27 billion in the first quarter, up 15.4% from $43.58 billion in the first quarter of 2011, according to an estimate released last month by the U.S. Commerce Department. It is the first time e-commerce sales have topped $50 billion outside the fourth quarter, the busiest quarter for online retailers because of holiday shopping.
The estimate, not adjusted for seasonality, says e-commerce accounted for 4.9% of total retail spending in the quarter, up from 4.6% a year ago. On a seasonally adjusted basis, the Commerce Department says e-commerce accounted for $53.16 billion of the $1.08 trillion of total retail spending during the first quarter; that's equal to 4.9% of total retail spending. Q1 2012 e-commerce sales increased 15.4% year over year on the seasonally adjusted basis, whereas total retail sales grew 6.5%.
"While the economic recovery continues to be painfully slow, the channel shift to e-commerce appears to be accelerating," says comScore chairman Gian Fulgoni, commenting on that company's Q1 e-commerce report, which estimates online retail sales increased about 16.6% in the first quarter, to nearly $44.3 billion compared with $38.0 billion for the same period on 2011. ComScore makes estimates of e-commerce sales by tracking the online behavior of some 2 million consumers who agree to be tracked, about half of them in the United States. Commerce Department estimates are based on a quarterly survey of more than 11,000 U.S. merchants.
E-commerce spending increased by at least 17% year over year for several product categories, comScore says. Sales of digital content and subscriptions, computer software, consumer electronics, jewelry and watches, and event tickets all grew faster than overall industry sales during the first quarter.
With online grocery sales growing, Internet Retailer has changed the way it analyzes Commerce Department data to calculate what percentage of total retail sales e-commerce represents. Internet Retailer now excludes only retail categories that cannot be bought online—automobiles, fuel and foodservice sales. Previous reports excluded sales for categories not commonly bought online, notably groceries.
This change means sales the Commerce Department attributes to food and beverage stores are now included in Internet Retailer's calculation, as consumers in many areas can shop for groceries online. Consumers last year spent an estimated $479 million with online grocer Peapod LLC, No. 52 in Internet Retailer's 2012 Top 500 Guide, for example.
Using the new calculation, Internet Retailer estimates that e-commerce accounted for 7.3% of total unadjusted retail sales during the quarter, up from 6.8% in the first quarter of 2011.
On a quarter-over-quarter basis, e-commerce sales declined 18.6% from Q4 2011, according to the Commerce Department. That decline is in line with previous years' decreases as sales slow after the holiday sales season.
Retailers also reduced free shipping promotions following the holiday season, comScore says. During the first quarter 48.8% of e-commerce transactions included free shipping, down from 51.8% during Q4 2011. While fewer orders shipped free, comScore says the 48.8% still represents the highest-ever percentage of orders with free shipping outside of the holiday season.
Web traffic and sales attributed to tablet computers like the iPad also increased in the first quarter. A comScore survey says 38% of tablet owners reported making a purchase on their tablet during the first quarter. Web traffic from tablets also grew dramatically in the first quarter of this year. Adobe Systems Inc. says consumers using tablets accounted for 4.3% of web traffic in the first quarter of 2012, a 616% increase from 0.6% of web traffic in Q1 2011. Adobe projects tablets will account for 7.2% of all web traffic in Q1 2013 and 10.4% in Q1 2014.