Double-Digit Growth for Online Sales

Experts hope upward trend continues into summer.

by staff writer
- May 20, 2010

Analysts are encouraged, but guarded, after the U.S. Commerce Department reported two successive quarters of double-digit growth for online sales.

E-commerce grew 14.3 percent year-over-year in the first quarter of 2010, which followed a 14.6 percent increase during 2009's fourth quarter. This was reportedly the first time year-over-year online sales grew by double digits for two consecutive quarters since 2008.

Online sales accounted for 7.95 percent of all retail sales, a slight increase from the 7.2 percent figure recorded in the first quarter of 2009, according to the U.S. Commerce Department. Sales in brick-and-mortar shops, not including grocery stores, showed an uptick of 3.42 percent.

"The Web continues to win because it's a channel where consumers can easily price-compare, where the selection continues to be superior," says Sucharita Mulpuru, a Forrester e-commerce analyst. "It's a channel that consumers are getting more accustomed to every day, now that more [people] have access to the Web more hours daily than ever before, and because the shopping experience is, frankly, more fun."

Maintaining this sales momentum will be challenging

Total online sales during this year's first quarter reached $38.1 billion.

The upward trend seems to be continuing. Sales in April were up by 9.3 percent year-over-year, notes the National Retail Federation. Experts are hopeful the upward trend will continue as graduations near, says Rosalind Wells, the NRF's chief economist.

"Spending on discretionary items has fallen by the wayside these last few years, and we are encouraged to see consumers dipping into that pot once again," she says.

Shoppers are expected to spend an average of $89.95 on graduation presents, about $1 more than they did last year. Overall graduation spending should reach $3.9 billion, the NRF projects.

"Maintaining this sales momentum will be challenging," Wells continues. "Until our economy begins to create jobs and reduce unemployment, the breadth and sustainability of this recovery remains uncertain."

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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