U.S.: E-Commerce Tops $32B in 2001

U.S. e-commerce purchases topped the US$10 billion level in the fourth quarter of 2001 and totaled $32.6 billion in the year as a whole, growing much faster than overall retail sales, according to new figures from the U.S. Department of Commerce (DOC).

In fact, the government data depicts online commerce as a sector that managed to keep growing in a slackening economic environment. While total retail sales grew by just 3.3 percent year over year, e-commerce gained 19.3 percent.

"We're now in a period of nice, reasonable, organic growth for e-commerce," David Schehr, research director at GartnerG2, told the E-Commerce Times. "And that's going to continue as more and more businesses learn how to use the Web."

Slowing Down

On the other hand, the government numbers showed a steep drop-off in year-over-year growth rates. Last year, the Census Bureau, which compiled the data, said sales in 2000 grew 62 percent over 1999 levels.

"2001 was definitely a dark year economically, and there are signs out there that we're headed for a turnaround," Christopher Kelley, an analyst at Forrester Research (Nasdaq: FORR), told the E-Commerce Times. "If e-commerce was still able to get growth in 2001, that means the Web is poised in a good position when we do see things improve."

Fourth and Goal

In the fourth quarter, overall retail sales rose about 5 percent from the year-ago period, while e-commerce grew 13 percent to just over $10 billion, according to the DOC numbers.

E-commerce also grew dramatically on a quarter-to-quarter basis, jumping 34 percent from the third quarter, while retail sales rose just 9.5 percent in the period.

While that figure is below the majority of estimates made going into the fourth quarter, it does not include online travel sales, which also have continued to grow at a steady rate.

The strong fourth quarter came after a year that otherwise saw e-commerce sales fluctuate very little, a sign analysts said points to the maturity and consistency of the industry.

Sales in the first quarter totaled $7.59 billion, then dipped slightly to $7.45 billion in the second quarter and ticked back up to $7.47 billion in the third quarter, according to the DOC.

One Percent Rule

For all of 2001, e-commerce accounted for just over one percent of all retail sales in the United States, up slightly from the year before, the DOC said.

But that percentage should start to increase soon, according to Schehr.

"Within the next few years, we expect that figure to reach 4 or 5 percent," he said. One big reason will be an expected uptick in online auto sales. "You only need to move a relatively few $30,000 cars to start having a real impact on that figure, as opposed to $15.99 CDs."

Hard To Measure

At the same time, though, the true impact of e-commerce will become more difficult to measure, according to both Schehr and Kelley.

Retailers are becoming increasingly savvy about multichannel marketing and selling, and consumers are switching between the Internet, retail stores and catalogs without a second thought.

"No one has figured out how to measure the influence of the Internet on sales, at least not yet," Schehr said. "The sales growth will continue, but there will be even more growth in the movement between those channels."

"It shows the importance of multichannel retailing right now," Forrester's Kelley added. "This is going to be a year where companies that focus on doing that and that do it well will have a huge advantage. The numbers will only tell part of the story from now on."