E-Commerce Outlook Is Bright

Online-Shopping-AWhile online retail could soon lose its immunity from state taxation, new research shows that the sector has never been more healthy.

Led by growth in digital content and subscriptions, online sales grew 13% -- to $50.2 billion -- in the first quarter of the year, according to comScore data.

“As long as job growth continues and consumer sentiment remains positive, the outlook for e-commerce in 2013 remains bright” said comScore chairman Gian Fulgoni.

“One wild card is the possible enactment of legislation requiring state sales taxes to be collected on every e-commerce transaction -- which would reduce the Internet’s traditional price advantage and possibly dilute the channel’s growth rate,” Fulgoni warned.

On Monday, the Senate passed a bill that would make it easier for states to collect sales taxes for online purchases. The bill is now headed to the House; expect opposition from Republicans who view any such legislation as a tax increase.

During the first quarter of the year, online sales growth was actually down slightly from the previous quarter.

“It was a point or two below that of the preceding quarters,” according to Fulgoni. “One potential explanation for this mild deceleration is the payroll tax increase, which went into effect in 2013 and which removed some disposal income from Americans’ wallets.”

The growth, however, marked the 14th consecutive quarter of positive year-over-year growth, and 10th consecutive quarter of double-digit growth, per comScore.

Along with digital content and subscriptions, strong growth categories included apparel and accessories, sport and fitness, consumer electronics, and consumer packaged goods. Each category grew at least 20% year-over-year, comScore found.

Overall, ecommerce accounted for 10.6% of discretionary dollars spent during the quarter -- the highest share on record, according to comScore.

Also of note, nearly half (48%) of time spent in the retail category occurred on mobile devices, with smartphones (34%) outpacing tablets (14%). Apparel and accessories was the highest-grossing mobile product category with nearly $1 billion in first-quarter sales.

Recommend (1) Print RSS