ABA Banking Journal - September 2014 - (Page 8)
BY WELLS FARGO ECONOMISTS
One recent trend within retail sales has been the
E-COMMERCE AS SHARE OF NONFOOD RETAIL SALES
sizable growth in nonstore sales. The latest Census
Percent, seasonally adjusted
report on monthly retail sales shows that nonstore
sales rose 8.1% over last year's levels-far exceed7%
E-commerce as aspercent of total:Total: 6.2% 6.2%
E-Commerce a a Percent of Q1 @ Q1 @
ing the growth rate for the other categories within
retail sales. One key component of nonstore retail
sales is online sales, or e-commerce, which has
played an increasing role in driving overall sales in
recent years. Online retailers are defined as retail
outlets that have at least 50% or more business
online. There has been a clear shift in the com3%
position of retail sales toward greater e-commerce
over the past decade, and this shift is spilling over
to other areas of the economy. While we do not
predict the demise of traditional brick-and-mortar
retailers, new technologies will continue to put
pressure on traditional retailers as they are forced
to compete with their online counterparts.
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
After a dramatic decline during the Great
Recession, retail sales growth has fluctuated near
historical norms since 2010. More favorable economic conditions along with job
products and then purchase the prodgains helped to support the sustained growth in retail sales over the past several
uct at the best price.
months. Even with sustained gains in retail activity, there has been a notable shift
While it is unlikely that technology
in the composition of total sales activity. Since the early 1990s, nonstore retail
will ever completely replace the trasales growth rates have been consistently above the rate of overall retail sales.
ditional shopping mall, competition
Although the recent economic recovery has contributed to these upward
from the internet has emerged as one
gains, the driving force behind the discrepancy of total retail sales and e-comof the greatest challenges facing brickmerce sales growth has been the proliferation of new technologies. The increasand-mortar stores today.
ing adoption of smartphones and tablets, as well as the rising number of internet
E-commerce sales are expected to
users, has been crucial for accelerating e-commerce development.
continue to accelerate at a healthy
Consumers also have become progressively more tech-savvy since the technolrate in the coming years, and they
ogy boom, and, as a result, their tastes and preferences have evolved. Many indishould continue to affect the compoviduals now prefer the benefits of using technology to make online purchases.
sition of future retail sales. The net
For example, one reason buyers may decide to purchase online is timeliness;
result of evolving technologies and a
with high-speed search engines now allowing consumers to search through thoushift in consumer tastes and prefersands of store inventories in seconds, the hours spent browsing at a shopping
ences represents the changing face of
mall are saved.
Another trend that has come about in recent years has been an increase in
price-comparison shopping through the use of mobile technologies. A 2013
The authors, all with Wells Fargo Securisurvey by Forrester Consulting found that 75% of consumers would be swayed
ties, LLC, are Eugenio Alemán, senior
to purchase a product online, rather than in store, if free shipping was available.
economist; Michael Brown, economist; and
Many customers now browse shopping malls and online retailers to compare
Zachary Griffiths, economic analyst.
ABA BANKING JOURNAL
The changing face of retail sales
Table of Contents for the Digital Edition of ABA Banking Journal - September 2014
Sales of insurance pay off
Pass the Aspirin
Payment trends: Threat or opportunity?
Working together to protect against identity theft
Around the ABA
ABA Banking Journal - September 2014