A Joyless Holiday Season for E-commerce
Jan 4th 2013 6:24AM
Research firm comScore reports that e-commerce sales for the November-December holiday season rose only 14% to $42.3 billion. That growth was weak, and the number modest when the dominance of Amazon.com Inc. (NASDAQ: AMZN) is taken into account.
E-commerce is supposed to be the future of retail, but for many bricks-and-mortar companies like Wal-Mart Stores Inc. (NYSE: WMT), it is still only a small percentage of sales. Chains that most need to improve online revenue, like Best Buy Co. Inc. (NYSE: BBY), have made almost no progress at all. And, in an environment in which total e-commerce struggles, its chances for improvement are further reduced.
Amazon's part of e-commerce is so large that it squeezes many other retailers almost out of the market. The company reported when it announced third-quarter earnings that:
Net sales are expected to be between $20.25 billion and $22.75 billion, or to grow between 16% and 31% compared with fourth quarter 2011.
That leaves a much smaller revenue market for the balance of the industry than the comScore data show.
Among the details of e-commerce sales is more depressing information. The three busiest days of the holidays, based on e-commerce revenue, posted only the most modest growth over the same days in 2011. Thanksgiving weekend sales were higher by only 15% to $1.187 billion. Cyber Monday sales rose only 17% to $1.465 billion. And Green Monday sales were up only 13% to $1.276 billion.
A master of understatement, comScore chairman Gian Fulgoni said:
This year's growth rate is essentially on a par with last year's. But despite many positives for the online sector, this year's season did not quite perform up to our initial expectation for growth rates in excess of 16 percent as we fell a billion dollars short of our expected total of $43.4 billion.
For a sector that is supposed to eventually save the retail industry, "on par" is not enough.
Filed under: 24/7 Wall St. Wire, Internet, Retail Tagged: AMZN, BBY, featured, WMT