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E-retail gains more ground – will SA follow the trend?

E-retailers are gaining market share from physical retailers in the wake of the recession, comScore says. Increased online shopping for consumer electronics, along with the increasing popularity of mobile devices, are helping to drive growth for e-commerce.

 
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The $38.0 billion in sales that e-retailers collected during the first quarter of 2011 comfortably surpassed pre-recession e-retail sales from the first quarter of 2008 of $31.8 billion, according to comScore Inc. during a conference call today.

In analyzing the data, the web measurement firm says the 19.5% growth in e-commerce since early 2008 shows that online retailing has recovered faster than bricks-and-mortar retail.  During the call, designed to shed light on comScore’s recent e-commerce estimates for the first quarter,  participants offered no corresponding figure for growth in total retail sales over the same period. But according to unadjusted U.S. Commerce Department tallies, total retail sales in the first quarter of this year were 1.2% higher than during Q1 2008, whereas e-retail sales were up 26.3% in the same span.

ComScore attributes e-retail’s strong recovery, in part, to consumers shifting their buying behaviors, particularly in the consumer electronics category. ComScore says about 50% of all computers and 30% of all consumer electronics bought in the United States are now purchased online. “This is sending shockwaves through the retail sector,” says Gian Fulgoni, comScore chairman. “Some multichannel retailers losing business at physical retail are not able to gain enough online to offset the loss.”

33% of all smartphone owners say they use their phones to check prices at other merchants while in a retail store, according to a comScore survey conducted in March. “It used to be that if you got the consumers in the store the likelihood of closing a purchase was pretty high,” Fulgoni says. “The reality today is that with smartphones, consumers can visit, touch and feel a product, then scan the bar code and get online and compare the price. Retailers now feel that they are competing with Amazon within their own store.”

Electronics retailers aren’t the only retailers noticing consumer buying patterns change. Although e-commerce accounts for only 1.2% of total sales made at supermarkets, mass merchandise and convenience stores, consumers are shifting at least some of their consumer packaged goods purchases, like soap and groceries, to e-commerce sites. Consumers spent approximately $15 billion online for packaged goods products in 2010, 10% more than in 2009, comScore says. Approximately 12% of Internet users say they’ve bought grocery items online.

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