The year-end-splurge online may come as no surprise.
The pullback in the first quarter may come as no surprise, either.
The overall movement is upward — where eCommerce is following a long-term trend, moving beyond pre-pandemic levels and showing staying power. But the volatility is also in evidence.
The read across here is that omnichannel commerce, or brick-and-mortar channels, are continuing to gain some favor with consumers, at least as 2024 moves into the back half of the year.
We noted in this space earlier in the week that April retail sales were flat, overall, but online sales slipped 1.2% over March’s levels.
And as far as the first quarter shows us, the latest data from the Federal Reserve, released Friday (May 17), indicated that total unadjusted retail sales were $1.7 trillion, up 2.8% from the same quarter last year. Total eCommerce sales were up 8.5% through the same period. eCommerce “share” as a percentage of the total was 15.6%, up from 14.8% last year.
Looking across linked, consecutive quarters, it might seem that eCommerce is “growing” more slowly than overall retail sales — that is, when retail sales grow, quarter over quarter. And eCommerce sales decline more precipitously when overall retail sales lose momentum, quarter over quarter. The recent 1Q readings are well below the “peak” percentage seen this past holiday shopping quarter, which were marked by a 17% contribution from eCommerce sales.
Looking at the recent zenith of spending — the fourth quarter, traditionally the peak quarter of consumer enthusiasm in loosening the household purse strings — the first quarter represented a 9.2% decline in retail sales as a whole, outpaced by the 17% dip in eCommerce sales.
It’s interesting to note, as the Fed discloses in its report, “eCommerce sales are measured as sale of goods and services where the buyer places an order, or the price and terms of the sale are negotiated over an Internet, mobile device … or other comparable online system. Payment may or may not be made online.”
The language leaves room for the omnichannel part of commerce to be part of the equation — conceivably, even ordering, picking up and paying on premise.
Walmart’s recent earnings results, where same-store sales growth and 22% online sales growth were underpinned by pickup and delivery demand, are testament to this. And, as reported earlier this year through the joint research of PYMNTS Intelligence Visa Acceptance Solutions, 31% of shoppers fall into the category of using digital technologies in store, and 11% make purchases digitally for in-store pickup.
April’s data may be a bit sobering — and hints at more volatility ahead.