According to the US Census Bureau, ecommerce sales in the second quarter of 2013 accounted for 5.8% of overall retail sales and grew 18.4% over Q2 2012. This is in keeping with projections earlier this year that had ecommerce growing at roughly 3-4 times the rate of overall retail. So it’s not surprising that the latest round of earnings reports from retailers were in line with these figures.
Retail spending is slowly picking up. While there are still rough patches in some markets, overall, the time is now for retailers to capitalize on the investments they have made in the last two years. In both the Baynote 2013 Holiday Predictions Survey, as well as the Annual Merchant Survey by the e-Tailing Group, we saw the vast majority of retailers make significant investments in ecommerce platform technology and SEO/SEM while at the same time pouring resources into improving the customer experience onsite through optimizations in product detail pages and others. The strategy is paying off.
Growing Online Revenue
Just look at the results of companies like the Gap and Aeropostale. In both cases, the companies grew online revenue 27% and 22% respectively. But there was a difference – the Gap grew overall revenue by 8% while Aeropostale lost 6% on overall sales. Aeropostale, it appears is a bit newer to the eCommerce game than the Gap, and is still having to invest and make the transition from bricks to clicks. The Gap sees upwards of 12% of their sales from eCommerce, while Aeropostal has just over 8%.
With an improving retail economy, I hope that companies like Aeropostal and others stick with it. The retail economy is changing fast, and now is the time to hang on, while shoppers are improving their willingness to spend. Every bit of investment made today will be sure to pay off tomorrow when, in 2014, research from Deloitte, KPMG and other suggest a more robust consumer economy.