Online Retailing Boomed In 4QOnline Retailing Boomed In 4Q

Online commerce boomed in the fourth quarter of last year and for the year as a whole, despite a slumping economy, according to a study released Wednesday by the Census Bureau of the Commerce Department.

According to the study, online retailers had $10 billion in sales for the quarter, a 13.1% increase from the same period in the previous year. In contrast, total retail sales were estimated at $861 billion, up only 5.3% from 2000. Online sales accounted for 1.2% of all retail transactions in the quarter, the highest point since the department began collecting data in the fourth quarter of 1999. For 2001 as a whole, E-commerce sales amounted to $32.6 billion, up 19.3% from 2000. Total retail sales grew just 3.3%.

The figures come from a survey of retail businesses performed by the Census Bureau on a monthly basis, a spokeswoman says. The final numbers don't include the billions of dollars in sales from online travel sites, she says, since travel is not classified as retail.

Gartner G2 research director David Schehr expects E-commerce to account for 4% or 5% of total retail sales by 2004. "We're now into a nice, steady, reasonable growth rate," he says. "You're not going to see rocket-to-the-moon numbers again, but it's going to keep increasing." Schehr says E-commerce has become mainstream, with almost a third of all U.S. adults regularly buying products online. And now that online shopping is no longer a novelty, he believes the critical challenge for businesses has become the integration of their online and offline sales. "The mentality that you still see out there occasionally is that the different channels are like different companies," he says. "Executives involved in IT need to consider the importance of channel integration."