Census Bureau: Q2 E-Commerce Sales Up 4.6%

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U.S. retail sales on the Internet rose 4.6 percent to $12.48 billion in the second quarter from $11.92 billion in the first quarter, according to numbers released Friday by the Department of Commerce's Census Bureau.

When compared with the same second quarter a year ago, e-commerce sales jumped 27.8 percent. By contrast, total retail sales increased less than 5 percent for the same year-over-year period.

"There's still the perception that the Internet offers a lot of deals," said Robert Leathern, director and analyst at Nielsen//NetRatings, Milpitas, CA. "That has been perpetuated by some retailers who want to compete both in the store and online. So they offer far better prices online and free shipping as well."

This trend certainly is evidenced by the stunning growth of comparison-shopping sites. BizRate.com's shopping area's July 2003 performance versus the same month a year ago was up 75 percent, DealTime.com's 79 percent, NextTag.com's 116 percent and PriceGrabber.com's 127 percent.

Broadband's popularity also is contributing to the steady growth in e-commerce. There are 60 percent more Americans on broadband compared with a year ago, Leathern said.

"It's really increased significantly over the past one year and drives people to do everyday activities on the Internet," he said.

The latest data show the second quarter was the busiest non-holiday period for e-commerce since the Census Bureau started tracking online purchases in 1999. It also was the second-best quarter after the last three months of 2002, a period when e-commerce sales were $13.77 billion.

Unlike other economic indicators published by the Census Bureau, the data are not adjusted for seasonal or holiday-related variations. The bureau also calculated that e-commerce sales in the second quarter were 1.5 percent of overall retail sales -- the same as the prior quarter. But that may change, if Leathern's predictions for the upcoming quarters hold true.

"Indications are that it's going to be a record holiday season," he said. "I think there will be continued strong growth. We're going to be looking to quantify not just the online audience, but what impact will the Internet have on the offline channel."

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