Fourth-quarter retail e-commerce sales surged 24.6% from the previous year, according to the U.S. Census Dept. That rapid growth is a reason why fourth- quarter non-auto and non-gasoline retail sales looked much better than the widely followed chain-store sales figures.
The quarterly e-commerce figures also far exceeded the government's strong monthly figures for nonstore retailers, which includes catalog and other forms of direct sales. Fourth-quarter nonstore sales grew 7.6% from the year before, beating most other retail categories.As more consumers buy online, e-commerce sales account for a larger chunk of overall retail spending. Sales of $108 billion in 2006 topped those at electronics and appliance stores. And in the final quarter of 2006, online shopping accounted for 3% of total retail sales, nearly double the share at the end of 2002.
The torrid growth of online retail sales should continue through 2007. According to the research firm Cowen & Co., e-commerce retail sales will climb another 20%, to $129 billion, in 2007. One apparent reason for the ongoing strength is that e-commerce retailers are doing a good job. The fourth-quarter American Customer Satisfaction Index from the Stephen M. Ross School of Business at the University of Michigan showed an improved score for e-commerce businesses. In particular, online retailers are one of the highest-rated among the 43 different industries covered by the survey.
While the law of large numbers means growth of more than 20% per year will be hard to sustain, e-commerce sales are expected to climb at a double-digit pace for the rest of the decade, reaching 4.3% of total sales by 2010. —By James Mehring in New York