A discussion draft of the Online Sales Tax Simplification Act of 2016 is expected to be introduced in Congress soon.
Thanks to the consumer's tendency to shop more online, many retail chains reported sharper increases in web sales last year amid relatively slack store sales.
Among several retailers of various types and sizes, the story was the same: Thanks to the consumer's growing tendency to shop more online, their web sales last year grew at a much faster rate than total sales.
Abercrombie & Fitch Co., for example, closed U.S. stores and suffered a drop in profits in 2011, while e-commerce surged for the multichannel retailer of apparel and accessories for younger shoppers. For the fiscal year ended Jan. 29, 2012, Abercrombie's e-commerce sales (including shipping and handling fees) surged 36.1% to $552.6 million from $406 million in 2010, as its total sales grew 19.9% to $4.16 billion from $3.47 billion. The company also closed 71 U.S. stores and opened 47 in foreign markets.
The web accounted for 21.2% of the growth for Abercrombie & Fitch in the past fiscal year, although it represented only 13.3% of sales. Much the same was true for rival retail chain Urban Outfitters Inc. where direct sales (which mostly take place online but also include some catalog sales) accounted for 28.4% of growth, although they were only 20.4% of sales.
Urban Outfitters reported that direct sales rose 16.4% to $504.9 million for the year ended Jan. 31, up from $433.8 million the prior year, as total sales rose 11.3% to $2.47 billion from $2.22 billion and same-store sales decreased 4%. "We remain especially excited about the opportunities surrounding this channel," CEO Richard Hayne says.
Web sales last year at retail chain Kohl's Corp. grew 37.2% to about $1.02 billion, up from $743.4 million in 2010. (Total sales figures were not available at press time.)
Bucking the trend
One retailer that headed in the opposite direction last year was bed maker Select Comfort Corp., where web sales dipped 1.1% year over year to $64.7 million from $65.4 million, as total sales grew 22.7% to $743.2 million from $605.7 million. Shipments of large items like beds, of course, are always a challenge for online retailers, though even Select Comfort's web sales grew 15.0% in the fourth quarter to $17.6 million from $15.3 million in the year-earlier quarter, as total sales increased 26.8% to $189 million from $149 million.