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ECommerceTimes.com

U.S.: E-Commerce Topped $45B in 2002

U.S.: E-Commerce Topped $45B in 2002

It may be possible for e-commerce to sustain more of its gains heading into 2003. In past years, online sales have dropped sharply in the first quarter, as is typical with overall retail sales.

By Keith Regan
02/25/03 10:58 AM PT

E-commerce grew at a pace that put the overall economy to shame in 2002, according to the U.S. Department of Commerce (DOC), which said online sales surpassed US$45 billion during the year.

The DOC also said e-commerce is an increasingly large part of the overall retail economy, with 1.6 percent of the total pie in the fourth quarter of 2002, compared with 1.3 percent in the third quarter and less than 1 percent as recently as Q3 2000.

For all of 2002, e-commerce made up 1.4 percent of total retail expenditures. The U.S. government's figures do not include online travel or other ticket sales or money spent through online brokerages. Private estimates of online spending that include those categories have put 2002 spending at between $50 billion and $80 billion.

Strong Finish

In the fourth quarter of 2002, online sales rose 28 percent to $14.3 billion, the DOC said. This marks the best single quarter on record, replacing the fourth quarter of 2001, when $11.2 billion was spent on the Internet.

The government data actually suggests sales were slightly stronger than previously reported. Previously, comScore/Media Metrix had said sales in the holiday quarter totaled $13.7 billion.

Either way, the growth is impressive when compared with the overall retail industry, which grew just 1.6 percent year-over-year in the fourth quarter.

"The question about whether e-commerce would continue to grow after the economic boom has certainly been answered," Nielsen//NetRatings senior analyst Lisa Strand told the E-Commerce Times.

Savings in Vogue

Although convenience was once believed to be the driving motivator behind most online purchases, the idea that savings can be found online -- especially with the growth of discount and second-hand sites, such as eBay -- is back in vogue, Strand added.

"The economy drove people to the Web in search of bargains, and it looks like people are finding them," she said.

If that is true, it may be possible for e-commerce to sustain more of its gains heading into 2003. In past years, online sales have dropped sharply in the first quarter, as is typical with overall retail sales. A recent survey from Yahoo! and ACNielsen that tracks consumer confidence predicted shoppers would spend $4.8 billion during the first quarter, a modest rise over last year's levels.

Numbers Game

DOC spokesperson Carol King told the E-Commerce Times that some 11,000 retailers, chosen to represent the 2 million retail outlets nationwide, are surveyed by the U.S. Census Bureau for the report, which the department began producing in the fourth quarter of 1999.

"Companies have an easier time reporting online sales" than when the survey began, King said. But at the same time, multichannel retailers are seeing the lines blur between sales channels, making it more difficult to determine whether a purchase should be credited to a store, a Web site or both.

"We constantly refine the survey, and I expect we'll continue to do that as the marketplace changes," King added.


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