Usually the final word, Commerce Dept. e-sales report raises questions

Many in the e-retailing industry consider the online retail sales numbers from the Census Bureau of the Commerce Department to be authoritative. In fact, private researchers benchmark their numbers against the Commerce Department, which bases its numbers on a survey of 11,000 retailers nationwide.

So there was much head-scratching when the Commerce Department today reported online sales growth that was far more robust than the numbers reported by comScore Networks Inc., a research company whose numbers are highly regarded in e-retailing. The Commerce Department reported that e-sales of $12.48 billion were up 27.8% in the second quarter. On top of Q1 growth of 26%, first half online sales were up 26.9%. Yet comScore Networks reported 15% growth in the first half.

ComScore says that as near as it can tell, the discrepancy was the result of strong auto sales in the first half. The Commerce Department includes autos in its numbers; comScore does not. “It’s a legitimate difference in which categories to include,” says Daniel E. Hess, vice president of comScore. “For example, the Commerce Department includes automobile sales, which drove up total retail sales from Q1 to Q2.”

Backing out auto sales and other smaller disparities, such as event tickets and auction sales, from the Commerce Department numbers puts the two reports much closer in line, Hess says. The Commerce Department does not show the individual components that make up its e-commerce number. While she says that she can’t confirm that the discrepancy was caused by auto sales, Carol King, statistician with the Census Bureau, says pinning the blame on auto sales sounds reasonable to her.

Auto sales have not created a problem in the past, comScore says, because they were never such a large driver of retail sales as they were in the first half. Total retail sales for Q2 reached $858.8 billion, up 4.9% from Q2 2002. First-half total retail sales reached $1.63 trillion, up 4.5% from $1.56 trillion a year ago, the Commerce Department reports.

Online sales in Q2 and the first half accounted for 1.5% of all retail sales, up from 1.2% in Q2 and first half last year.