US online retail (non-travel) spending reached $37.5 billion during Q2 2011, according to estimates from comScore. This marks the seventh consecutive quarter of positive year-over-year growth and third consecutive quarter of double-digit (14%) growth rates.
On a quarter-over-quarter basis, e-commerce sales fell about 1% from roughly $38 billion in Q1 2011. Q4 2010. Similar small quarter-over-quarter declines also occurred between the first and second quarters of every year from 2007 to 2010.
In addition, on a quarter-over-quarter basis, e-commerce sales fell about 12% in Q1 2011 from roughly $43.4 billion in Q4 2010. However, comScore historical data shows that e-commerce sales generally peak during the fourth quarter due to holiday spending, and the decline is slightly less severe than the 13% drop experienced between Q4 2009 and Q1 2010.
Consumer Spending Continues Shifting Online
comScore analysis indicates the second quarter of 2011 saw a continuation of double-digit growth trends in online spending, ahead of the rate of growth in consumers’ overall spending. Almost 10% of discretionary consumer spending occurred online during the quarter. During Q1 2011, comScore tracked growth in online spending about double the rate of growth in offline spending.
“E-commerce’s benefits of convenience and lower prices continue to be the drivers of the shift,” said comScore chairman Gian Fulgoni. “At the same time, we are constantly reminded of an overall macroeconomic situation that is not indicative of a strong recovery. With economic growth remaining soft, the unemployment rate stubbornly high and financial markets in turmoil, consumers are less optimistic today than they have been in preceding quarters, which raises concerns for the future. We believe the third quarter will be an important indicator of which direction this economy is really headed and what that will mean for consumer spending.”
Online Sales Beat Pre-recession Levels
Online sales in Q2 2011 are substantially higher than those in the first three quarters of 2007, before the start of the global recession. Compared to Q2 2007 online sales of about $27.2 billion, Q2 2011 online sales are up about 38%.
Other Findings
- The top-performing online product categories were consumer electronics (excl. PC peripherals), computer hardware, computer software, and event tickets. Each category grew at least 15 percent compared to a year ago.
- The top 25 online retailers accounted for 66.4% of dollars spent online, down from 67.7% a year ago and down from a peak of 69.9% in Q3 2010, as small and mid-sized retailers continue to regain lost market share.
- The 14% growth in the quarter was primarily a function of an increase in the number of buyers (up 16%), with 70% of all internet users making at least one online purchase in the quarter.
Invesp: Time #1 Reason for Shopping Online
A leading 73% of consumers who prefer shopping online do so because it is time saving, according to July 2011 data from Invesp. This is one-third more than the 55% who say they prefer shopping online because of less prices (more than one answer permitted).
Other reasons to prefer shopping online that beat price include more variety (67%), easy to compare prices (59%) and no crowd (58%). Directly financial reasons, such as spending less on gas (40%) and less taxes (30%) were also among the less popular aspects of shopping online.
