U.S. Reports Q3 E-Commerce Surge

Despite an overall decrease in summer retail sales, e-commerce sales flourished from July to September, according to a report released Monday by the Census Bureau of the U.S. Department of Commerce.

The third quarter witnessed a 15.3 percent online sales gain over the previous quarter, while total retail sales fell 0.4 percent.

“[These numbers] strongly suggest consumers are becoming more comfortable with shopping online and in particular becoming more comfortable with purchasing higher ticket items online,” Robert Shapiro, Commerce Undersecretary for Economic Affairs, told the E-Commerce Times.

Grain of Salt

Shapiro cautioned, however, that it can be potentially misleading to compare the growth rates of e-commerce sales with those of overall retail because online sales are still such a small subset of total retail.

Although total Internet sales reached US$6.37 billion in the third quarter, online purchases still made up only 0.78 percent of all retail sales. The latter figure is up from 0.68 percent in the second quarter.

Shapiro said there are many products and services included in the total retail numbers that do not translate well to online business. Gasoline prices, for example, which dropped off a bit over the third quarter, had a much larger effect on the overall retail numbers than online.

Mail Order Thrives Online

The three categories of e-commerce retailers with the strongest growth in the third quarter were mail order firms, automobile companies and online bookstores.

“If more people feel comfortable buying automobiles online, that can boost the online retail numbers substantially because they are such large ticket items,” Shapiro said.

The study also found that mail order companies and traditional retailers showed faster growth than pure-play e-tailers.

“Mail order firms and traditional retailers have a lot of infrastructures in place to carry through to the Internet that pure plays still have to build, such as distribution systems, customer relation systems and billing systems,” Shapiro said. “Branding may also have something to do with it.”

Getting Comfortable

Shapiro attributed the summer e-commerce sales boost to increasing comfort levels with online purchases. Shapiro said that repeated Internet use and growing familiarity with other people buying online, such as friends and family, are easing customer concerns about security and Internet fraud.

“This quarter was also helped by back-to-school sales,” Shapiro said. “Next quarter will be boosted by holiday sales.”

The retail e-commerce sales estimate for the fourth quarter is scheduled for release in February.

The Commerce Department’s Monthly Retail Trade Survey covers all sales by companies primarily engaged in retail activities. However, the numbers generated by the Commerce Department do not include online travel services, financial brokers and dealers, or ticket sales.