95% of the orders at Hallmark Business Connections are processed online, CEO Tressa Angell says.
Web retailers' holiday outlook looks bright after third quarter e-commerce growth tops 17%.
A strong report from the U.S. Commerce Department on third quarter e-commerce sales and optimistic holiday sales projections from analysts should have online retailers feeling pretty good about their sales potential this holiday season.
The Commerce Department report released last month showed seasonally adjusted U.S. e-commerce sales reached $56.99 billion in the third quarter ended Sept. 30, up 17.3% from $48.59 billion for the same period a year ago. The Q3 growth follows three quarters when e-retail sales growth hovered just above 15%. The last time e-commerce sales growth was greater than 17% was in the first quarter of 2011, when growth clocked in at 17.2%.
E-commerce accounted for approximately 5.2% of total retail sales excluding foodservice—mainly restaurant and bar sales—during the quarter, up from 4.7% in Q3 2011 and 5.1% in Q2 2012, the Commerce Department says. Total retail sales excluding foodservice during the third quarter totaled $1.09 trillion.
When further excluding sales of autos and fuel—products not commonly bought online—Internet Retailer calculates that e-commerce accounted for approximately 7.7% of total adjusted retail sales during the third quarter, up from 6.8% a year earlier.
The third quarter e-commerce sales were also a 3.7% increase from $54.94 billion the Commerce Department reported for the second quarter. Moving into the fourth quarter holiday shopping season, an advanced retail sales estimate issued by the Commerce Department in mid-November pegged total retail sales excluding foodservice in October at $361.2 billion, up 5.6% from $342.0 billion in October 2011, and up 3.9% from September 2012 sales of $347.8 billion.
An analysis from web measurement firm comScore Inc. pegged Q3 online sales at $41.9 billion, 15.4% more than the $36.3 billion spent in the third quarter of 2011. ComScore draws on online purchase data from its panel of about 1 million U.S. online shoppers and excludes automobile and auction sales. Commerce Department estimates are based on a quarterly survey of more than 11,000 U.S. merchants.
The spending bodes well for the rest of the year, says comScore chairman Gian Fulgoni. "Such performance offers some optimism as we approach the holiday season, especially given recent improvements in consumer sentiment," he says. ComScore says 48% of consumers rate the economy as "poor," which is eight percentage points less than the second quarter. "With the housing market beginning to show signs of recovery in addition to increasing—if still underwhelming—job growth, there appears to be strong enough footing to support a very healthy online holiday shopping season."
ComScore issued a separate sales forecast for online holiday sales. It predicts e-commerce sales will increase 15% to 18% this holiday shopping season compared with 2011. Based on comScore's sales numbers from 2011, the 2012 projection puts online sales from Nov. 1 through Dec. 31 between $42.78 billion and $43.89 billion. One factor helping web sales this year is that there are two extra shopping days between Thanksgiving and Christmas, comScore says.
A forecast from Forrester Research Inc. (See websellingstats on page 96) also predicts 15% online sales growth in November and December, estimating that holiday shoppers will spend an average of $419 online during the period. Forrester vice president and principal analyst Sucharita Mulpuru-Kodali says online shoppers will spend $68.4 billion this holiday season, up from $59.5 billion last year.
Mulpuru-Kodali says a portion of those sales will come from, or be influenced by, consumers using smartphones and tablet computers to shop. "The mobile and tablet shopping trend tends to be amplified during the holidays as consumers spend more time shopping online with remote devices at home, in stores, and on the go," she says.
Retailers have ramped up their efforts to catch mobile shoppers during the holidays. Staples offered smartphone shoppers mobile-only deals on Black Friday, the day after Thanksgiving, for example. Dell, meanwhile, created its first tablet-optimized catalogs and smartphone mobile commerce sites specifically for Black Friday and Cyber Monday, the Monday following Thanksgiving.