STRONG Q2 ECOMMERCE SALES

7/15/16

Signs point to record e-commerce gains in Q2

A monthly retail sales report released today by the U.S. Commerce Department suggests that June e-commerce sales were quite strong, following big growth in May and April.

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Stefany Zaroban

It’s looking like the second quarter of this year was a really great one for online retail, with possibly the highest growth rate for e-commerce in years.
The U.S. Commerce Department doesn’t release its official estimate of Q2 e-commerce sales figures until August, but a separate report out Friday from the same agency suggests that the web was an unusually bright spot for the U.S. retail market in June. This follows similar upswings in May and April.
What the Commerce Department calls “nonstore sales” reached $46.91 billion in June, a 14.2% increase compared with June 2015, and the highest increase all year. For the quarter, nonstore sales reached $138.96 billion, a 12.7% increase compared with the second quarter of last year.
Nonstore sales occur mainly on the web but also include categories of retail sales that are declining, such as mail and phone orders and door-to-door sales. Thus, the growth in nonstore sales is consistently lower than the growth in e-commerce sales, which the Commerce Department reports quarterly. For example, nonstore sales grew 8.6% in Q1 while online retail sales grew 15.2%.
Because nonstore sales increased 12.7% in the second quarter, that could mean e-commerce alone grew near 20%.
Experts agree that it’s a good time for online retail, especially in categories closely tied to an improving housing market. “Q2 is looking especially strong for e-commerce,” says Andrew Lippsman, vice president of marketing and analytics at web traffic measurement firm comScore Inc. “It’s probably a combination of macroeconomic factors including low gas prices, full employment and wage growth. We’re also seeing some evidence that home goods, furniture and appliances are all strong, which suggests that maybe people are spending more on home improvements at this moment in time.”
ChannelAdvisor Corp., which helps e-commerce companies sell on online marketplaces, says its clients are doing well this quarter. What’s fueling that growth is an uptick in consumers using mobile devices to shop, while retailers are improving their logistics systems to speed delivery of orders, says Scot Wingo, the vendor’s executive chairman.
“Amazon is raising the bar with two-hour and two-day shipping and everyone is responding to it and consumers love it,” he says. “[Faster fulfillment] also eliminates one of the key advantages ‘offline’ has—immediacy.”
Nonstore gains come while the U.S. retail market as a whole was relatively strong in June and the quarter, according to the Commerce Department.  Total retail sales reached $402.61 billion in June, up 2.4% compared with last year. For the quarter, retail sales were $1.20 trillion, up 2.3%.