Aaron Schiff, a leading economist, provide an interesting analysis on the e-commerce retail sales in the United States. Here is the analysis –
“The US Census Bureau has been publishing quarterly statistics on e-commerce retail sales in the US since late 1999. There’s enough data now that some robust trends are emerging. I’ve taken the latest US Census Bureau data and stripped the effect of inflation out of it, so we can see the ‘real’ trends. First, this graph shows total e-commerce sales per quarter in billions of 2007 US dollars (ie today’s money). There’s been strong growth over time and total e-commerce sales in the most recent 12 month period were almost 120 billion US dollars. The real growth in e-commerce sales has averaged a bit under 900 million US dollars per quarter.
This next graph shows e-commerce sales as a percentage of all retail sales in the US. The growth in e-commerce has been strong, but it’s still only around 3% of total retail sales. However, e-commerce has been steadily displacing other sales channels in the US, and looks likely to continue to do so for the foreseeable future.
Next up is the annual growth rates of real e-commerce sales (in blue) and total retail sales (black). These are calculate as the percentage growth of sales in each quarter versus the same quarter in the previous year. So it’s growth over a 12 month period. On this basis, real total retail sales average 1.8% growth in any 12 month period, while real e-commerce sales have averaged about 25%. After a rapid start and then a decline caused by the dot-com crash, e-commerce growth has stabilised, and growth in the past two years has averaged 18.3% per year.
This last graph is an attempt at answering the question: To what extent is growth in e-commerce sales associated with growth in total retail sales? I’ve taken the quarterly growth rates of total sales and e-commerce sales and plotted them against each other. These are not the annual growth rates above, but the growth rate of each quarter compared to the previous quarter. This shows a positive but weak correlation between the two growth rates. There’s some positive relationship between growth in e-commerce sales and growth in total retail sales, but not a very strong one. This is some evidence in support of the idea that e-commerce growth is somewhat driven by total retail growth, but to a large extent represents sales shifting from traditional ‘offline’ channels to ‘online’ channels.”
Tags: E-commerce, Growth, Retail sales, US Census Bureau
