Today the US Department of Commerce reported that US non-ecommerce retail sales only grew 4% versus Q2 2012. While 4% growth is welcome news for the economy, that number masks the fact that, while ecommerce is still a small percentage of the retail total, it has grown faster than overall retail sales, jumping 18.4% over Q2 last year.
The official US Department of Commerce stats cite that ecommerce only makes up 5.8% of total retail sales. We feel this is understated, because their figures include services and products - like gas - that require a physical presence to purchase. They also don't factor in the influence of website visits on in store traffic. If you factor out non-web goods and factor in influence, you're likely seeing 20-25% of sales influenced by online behavior.
And that's significant, because actual ecommerce sales have grown faster than non-ecommerce sales for the past 10 years. The only time Q2 ecommerce growth dipped was in Q2 2009, at the height of the recession. Even then, ecommerce sales only slumped 3.7% while non-ecommerce plunged 12%. There is no denying that the growth of ecommerce is accelerating compared to non-ecommerce sales as the economy rebounds.
To show this more clearly, we took 2003 as a baseline index to chart retail sales growth in an effort to illustrate the rate of transition from traditional to ecommerce shopping. The resulting graph (above) shows that Q2 growth index rates for online retail sales are accelerating even faster than non-ecommerce sales as the economy starts to recover.
(Source: Analysis of US Department of Commerce Adjusted Retail Sales figures Q2 2003 through Q2 2013. Quarter over quarter indexed growth used for online and offline growth. NOTE: Quarter versus quarter analysis is important for retail analysis; a Q4/Christmas should always be compared to Q4 the prior year, not the Fall/Q3.)
Unfortunately, most retailers are still thinking about bricks versus clicks, and most still rely heavily on retailer or traditional B2B selling organizations to bring their products to market - that's a big mistake. For the manufacturer the question should not be "offline vs. online," but "are you where the customer wants to buy from you?"
Consumers think of a store as online and offline and will continue to migrate to the players that make it easy to buy. Pure online players like Amazon and eBay continue to experiment with stores, same day delivery, and showrooms. They get it - and your traditional retailers better take note.
Yeoman works with original manufacturers and publishers to help them align their sales and distribution channels. If you're not where your customers are buying or researching purchases - or worse, if you're not sure - give us a call. We'll help you find out where your customers are and execute a plan to get you in front of them when (and where) they are ready to buy.