E-Commerce sales jumped a strong 4.5% but before anyone gets too excited by the sales growth, E-Commerce represents only 8.1% of sales. Second, seasonal variations are in play.
E-commerce sales are sales of goods and services where an order is placed by the buyer or price and terms of sale are negotiated over the internet, an extranet, Electronic Data Interchange (EDI) network, or other online system. Payment may or may not be made online.
Bloomberg Econoday reports “The non-store component has been a leading strength of the monthly retail sales report, making the strong 4.5 percent quarter-to-quarter gain for second-quarter ecommerce sales no surprise. Year-on-year, ecommerce sales were up 15.8 percent in the quarter. As a percentage of total retail sales, ecommerce continues to move higher, up 2 tenths to 8.1 percent.”
Volatile Numbers
Economists do not estimate e-commerce sales.
Chart Legend
- Red: Q1
- Blue: Q2
- White Q3
- Yellow: Q4
I added colored lines to make it easier to see what’s really happening.
Two Perspectives
- E-commerce, only represents 8.1% of sales. A 4.5% gain on 8.1% is not that meaningful.
- This cyclically-volatile series does not appear to be seasonally adjusted.
For some reason, online sales tend to jump in the second quarter. The second quarter was the strongest quarter for four consecutive years.
This jump is just typical seasonal volatility. Many hate seasonal adjustments, but it is the only way to make sense of month-over-month or quarter-over-quarter variations.
Using unadjusted numbers, one can compare a month or quarter to the same period a year ago. The colored lines make it easy to spot.
Mike “Mish” Shedlock
My wife and daughter are probably the cause. Amazon boxes almost every day.
The e-commerce stores offer free returns, so my wife orders 3 pairs of shoes and returns the 2 that don’t fit as well. I wonder if they count the returns when they calculate sales?
That’s a good question
I don’t know the answer
Ha! Tell them Jeff Bezos is a Globalist – so no more business with Amazon!
Econoday today:
“Same-store year-on-year sales were up only 0.2 percent in the August 13 week which is the lowest reading of the year for Redbook whose sample, often in contrast to government data, has been reporting weakness all year. But at least in July, the government’s data, like Redbook, was indeed weak. And today’s results point to a second month of trouble for the ex-auto ex-gas reading of the August retail sales report which slipped 0.1 percent in July.”
A buck is a buck. More is better than less. If e-commerce went up and didn’t offset brick and mortar, then great. E-commerce should be going up in a healthy economy because it makes sense. Stores serve a purpose and will always exist, but mail-order has been around forever and the internet makes it really convenient. It’s the new Sears Catalog … the one that also served as privy backup stock way back then.
Good news.
Sears is first line. Corn cobs second.
Big difference between sales and profits. All those sellers on Amazon must fork over 15% of their total sale leaving very little left for them. It’s so funny how people just go to amazon believing that they are the cheapest. I know of a store that marks up their products almost 20% over their site and they pay the price without even checking anywhere else. Too lazy to bother.
Amazon has done a very good job of making shipping costs and delivery times predictable. As well as building a community of reviewers, both of product and Market retailers, that is large and deep enough to be both relatively trustworthy and exhaustive. People are generally willing to pay a bit more for labelled goods like Coca Cola than for some store brand they have never heard of, as well.
In the short run, increased automation of delivery (drones, autonomous trucks and warehouses) will likely continue to boost Amazon, as they can afford to do it right. But once 24-7 autonomous intermodal with last mile drone has been sufficiently commoditized, the amount Amazon can get away with charging its Marketplace retailers, will start to shrink.
Wow!
15% cut right off the top!
No wonder Belzos is buying everything in sight, such as the Washington Post.
You are right about others – Ebay, local stores, etc. – often having identical products way cheaper than Amazon and it’s dealers.
Sometimes as much as one-fourth to one-fifth the price listed on Amazon.
I shop internet for several reasons.
1. broader selection
2. saves time and gas
3. price comparisons are easy
4. returns are easy
….
Walmart has one of the worst slowest websites. Jet is worse. Jet prices are uncompetitive. Warren Buffett noticed. He sold his Walmart stock.
…
2Q is when women shop for clothes, shoes, bathing suits, makeup, perfume, and nest feathers.
Chart legend is incorrect. It should be as follows:
Chart Legend
Red: Q1
White: Q2
Blue: Q3
Yellow: Q4
So how does one reconcile e-commerce sales going up, yet shipping volume going down? Are bigger ticket items now being bought online, general prices going up, or something else in play?