E-Commerce Sales Hit 7% of Retail Volume for the First Time

Electronic commerce hit a milestone in the first quarter by accounting for 7% of total retail sales for the first time, the U.S. Commerce Department’s Census Bureau reported Friday.

Preliminary estimates from the Census Bureau pegged seasonally adjusted retail sales at $1.15 trillion, with e-commerce totaling $80.3 billion. In 2014’s fourth quarter, e-commerce accounted for 6.6%, or $77.6 billion, of $1.17 trillion in total retail sales, according to revised estimates.

E-commerce’s share of retail sales has been marching steadily upward in nearly every quarter that the Census Bureau has counted it. In last year’s first quarter, the $70.1 billion in e-commerce sales accounted for 6.2% of $1.13 trillion in seasonally adjusted retail sales. In the fourth quarter of 2006, e-commerce, with $30.3 billion in volume, had less than half the share of total retail sales than is does now, 3.1%.

E-commerce crossed the 4% threshold in 2009’s second quarter; the 5% mark in 2011’s fourth quarter, and the 6% mark exactly two years later.

The increasing market share of e-commerce comes as online retailing sustains much higher growth rates off of far a smaller base than physical commerce. Total seasonally adjusted retail sales grew just 1.6% year-over-year in 2015’s first quarter while e-commerce grew 14.5%. In the big-spending fourth quarter, total retail sales grew 3.8% while e-commerce increased 14%.

The Census Bureau defines e-commerce as sales of goods and services where the buyer places an order online or negotiates prices and terms on the Internet, mobile device, or other online system, though payment may not necessarily be made online. The Bureau gets sales data from a random sampling of 12,500 firms to make estimates for total sales by the nation’s approximately 2 million retailers. The majority of e-commerce sales are charged to general-purpose credit and debit cards.