Online Retail Growth Surpasses Offline Growth


by Claudia Bruemmer

As the 2011 holiday shopping season moves into its final weeks, research indicates ecommerce sales growth is greater than that of offline stores. Due to the increasing consumer preference for online shopping, major retail chains have been keeping their doors open 24 hours.

The U.S. Department of Commerce released early retail sales estimates for November that show total retail sales increased 6.7 percent in November. However, sales at non-store retailers increased at more than twice that rate (13.9 percent). The Commerce Department says ecommerce and mail-order sales make up over 75 percent of the non-store retailer subsector.

According to the Commerce Department, total retail sales increased 0.2 percent from October to November, whereas non-store retail sales grew 1.5 percent on a month-to-month basis. The November estimates show that physical stores are continuing to lose ground to ecommerce retailers during the decisive holiday sales period. Non-store retailer sales accounted for 8.7 percent of total adjusted retail sales in November, versus 8.2 percent in November 2010 and 7.8 percent in November 2009.

Early research data for December from the International Council of Shopping Centers and Goldman Sachs Weekly Chain Store Sales Index show a continuing trend: store sales grew 2.9 percent year-over-year for the week ended Dec. 10th. In tracking web sales, comScore reports online sales increased 15.7 percent for the week ending Dec. 9th, compared to the same period last year. Additionally, Green Monday (the second Monday in December) experienced an overall sales increase of 19 percent compared with the same time period in 2010. ComScore estimates approximately 30 percent of all consumer electronics sales in the U.S. are currently purchased online, as online consumer electronics sales grew more than 15 percent during the third quarter versus the same time a year ago.

Best Buy reported its same-store sales of consumer electronics declined 4.8 percent during the third quarter ended Nov. 26, compared with the same quarter last year. The electronics retailer also reported that same-store sales (including BestBuy.com sales) increased almost 1 percent during the quarter. On its own, BestBuy.com revenue increased 20% percent year-over-year during Q3.

Because of the above trends, many store retailers have announced they will extend their hours to capture sales before Christmas. Sears announced most stores will stay open until midnight starting Wednesday (today) and lasting through Friday, December 23rd. Department store chain Macy’s said it will have 14 stores open 24 hours a day in the final days before Christmas and another 27 stores will be open until 2 a.m. On top of that, online-only retailer Amazon.com extended its deadline to qualify for its free super saver and standard shipping until Dec. 19th.

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