Retailers shift their ad spending from TV, radio and print ads to digital ads.
Online sales of 42 publicly held retailers doing business on the web grew at a surprising 21% rate in the third quarter while total sales of those same retailers during that period grew only 1.4%, according to analysis by Internet Retailer.
Online sales of 42 publicly held retailing organizations doing business on the web grew at a surprising 21% rate in the third quarter to $7.1 billion, while total sales of those same retailers during that period grew only 1.4% to $25.3 billion, according to an exclusive analysis by Internet Retailer. It is the most stunning evidence yet that web retailing, though not immune to recession, is far more resistant to it than stores and catalogs, which suffered an overall decline for the 42 retailing groups surveyed.
For the 42 public companies analyzed, web sales in the third-quarter accounted for 28% of their total retail sales compared to 24% in the third quarter of last year, further evidence that the growth of the Internet’s share of retailing continues despite the recession. “The data is showing that there’s a growing number of consumers who prefer web shopping to store shopping in both good times and bad,” observes Jack Love, publisher of Internet Retailer. “While the recession may have begun a year ago, the first significant impact on the non-auto retail sector was seen in the third quarter, and it’s clear the impact on stores was devastating while the impact on the web was relatively minor.”
The performance on the web in the third quarter was anything but even for the 42 retail companies. Pure-play merchants, those with little or no store or catalog sales, experienced by far the fastest online growth rates. Led by Amazon.com., web-only merchants grew Q3 Internet sales by 27% in the quarter to $5.3 billion. Since Amazon accounts for 80% of the sales in this group, its 31% growth to $4.2 billion in the period clearly overstates the growth of the web-only merchants as a whole. Nonetheless, even without Amazon in the mix, they grew 15% in Q3.
Web sales for chain retailers in the third quarter rose year-over-year by 4.8% to $1.09 billion, while total sales declined by 5.8% to $13.74 billion. “Nothing underscores the case for retail chains to put more emphasis on their web operations more than these numbers,” says Love.
Among all merchants in the analysis by Internet Retailer, Kohl’s Corp. posted the biggest increase in third quarter web sales, growing year-over-year by 92% to $81.7 million. The merchant posting the biggest drop in web sales was Select Comfort Corp., the Sleep Number Bed maker, which suffered a 41% decline sales in Internet sales in the quarter to $8.4 million.