A sunny forecast for e-retail
January 28, 2013 12:17 PM
Online sales will increase between 9.0% and 12.0% in 2013 over 2012, again outpacing total retail sales, which will increase 3.4%, the National Retail Federation, a retail industry trade group, predicted today.
The projected rise in online sales, which was put together by Shop.org, the trade group’s online digital division, will follow a year-over-year increase in web sales of 11.1% for the last two months of 2012, Shop.org adds.
Shop.org and the NRF didn’t release dollar figures to coincide with their growth projections. Their figures exclude sales related to automobiles, gas stations and restaurants.
ComScore Inc., the web measurement firm, plans to release online sales figures for 2012 later this week, though it doesn’t project future sales growth, says Andrew Lipsman, vice president, industry analysis. The U.S. Department of Commerce is due to release its figures on 2012 online sales next month.
In 2011, e-commerce sales increased 16.1% over 2010, to $194.30 billion from $167.30 billion, while total retail sales (excluding sales related to fuel, autos and restaurants) rose 5.5% to $2.88 trillion from $2.73 trillion, according to figures in the Internet Retailer Top 500 Guide.
Shop.org and the NRF also did not give specific reasons why online sales would continue to grow faster than total sales, though they indicated that the economy will lead consumers to search for bargains that are often found on the web. The NRF cited several economic conditions that will limit consumers’ spending this year, forcing retailers to sharpen their merchandising and marketing strategies.
“Retailers will compensate for the drag on household spending this year by managing inventories and focusing on providing value for their shoppers through unique promotions in stores and online and exclusive product lines,” said NRF president and CEO Matthew Shay.
While the labor market continues a “modest recovery” and housing values are starting to improve, the NRF said, consumers remain constrained in their spending by modest growth in income, the increase this year in payroll taxes, and ongoing concerns about whether Washington will work out the “fiscal cliff” matters over federal spending and taxes.
Nonetheless, the NRF says it expects consumer confidence to improve along with the economy in the second half of this year.
“While it’s too early to know the full effect of higher payroll taxes, there’s no question that many consumers will feel some kind of impact from the change in their paychecks,” says Jack Kleinhenz, the NRF’s chief economist. “That said, consumers have in the past shown a resiliency in the face of uncertainty, and we expect those impacted to adjust to smaller budgets by trading down or simply cutting back on certain items. Overall we foresee some improvements in the second half of the year should the outlook for job creation and income growth improve.”