Retailers shift their ad spending from TV, radio and print ads to digital ads.
It was the first time since the first quarter of 2008 that e-commerce sales grew by more than 10% year over year for two quarters in a row.
The double-digit growth in e-commerce in the fourth quarter was no fluke: The U.S. Commerce Department reported last month that e-commerce sales grew 14.3% in the first quarter, following the fourth quarter’s 14.6% gain. It was the first time since the first quarter of 2008 that e-commerce sales grew by more than 10% year over year for two quarters in a row.
The Commerce Department figures also show the continuing shift of retail sales to the web. While e-commerce grew 14.3% compared to the first quarter of 2009, after adjusting for seasonal variations, total retail sales grew only 6.3%. Sales at stores, excluding grocery stores, grew only 3.42%, meaning that e-retail grew at more than four times the rate of the stores that web retailers mainly compete against.
Put another way, 7.95% of Q1 retail sales took place online, not counting purchases of groceries, automobiles, fuel oil and restaurant meals that rarely take place on the web. That was up from 7.20% in the first quarter of 2009. This is an Internet Retailer estimate based on Commerce Department data. Counting retail sales of all types, the web accounted for 4.0% of total sales in the first quarter of 2010 versus 3.7% a year earlier, the Commerce Department says.
E-commerce sales totaled $38.7 billion in the first three months of 2010, when adjusted for seasonal variations, a 1.6% increase over seasonally adjusted sales of $38.1 billion in Q4 2009.
The Commerce Department estimate came in higher than the 12% growth that retailers reported to Forrester Research Inc. in an April survey by the research and consulting firm. But it doesn’t surprise Forrester e-commerce analyst Sucharita Mulpuru that the web is steadily taking a larger share of retail sales.
“It’s a channel that consumers are getting more accustomed to every day now that more consumers have more access to the web more hours daily than ever before, and because the shopping experience frankly is getting to be more fun,” Mulpuru says. “You can create outfits online, you can share products with others, you can read customer opinions on topics, you can watch videos. It’s a much more immersive experience than ever before and that engages people.”