On-line Sales Share of Retail Sales Hits New High in May

The U.S. Census Bureau retail sales data released last week showed that in May, the share of retail sales that are sold on-line or via a catalog rose to 20.5% of retail sales from merchants selling products that are sold both in brick and mortar stores, on-line or through a catalog. This means that 20.5% of all retail sales that could be delivered by FedEx, United Parcel Service or the United States Postal Service, are being delivered by these firms. (Details on how the proportion is calculated is at the bottom of this post.)
May represents the sixth month in a row that on-line/catalog merchant sales were more than 20% of sales of items that could be delivered to a consumer were delivered to the consumer rather than purchased at a retail store A year ago 18.8% of sales of items that could be delivered to a consumer were delivered. The following chart shows retail sales data dating back to 1992 as provided by the Census Bureau.  

The chart also includes an exponential trend, and for the statistical geeks, the trend equation and R-squared. The trend line illustrates that the shift to on-line retailing has grown exponentially since data was available with deviations occurring only around the two recessions in the period graphed.  The statistical properties of the exponential trend are improved insignificantly from last months trend.

The shift to retail sales from on-line and catalog merchants may partially explain the decisions of Borders, American Eagle, Gap, Lowe's and other brick and mortar retailers to close stores or stop expansion as the total dollar sales at brick and mortar outlets stagnates as on-line and catalog sales grow.

Explanation of Chart Data

The proportion illustrate in the chart represents the proportion of catalog and on-line sales estimated by the Census Bureau as a portion of sales at furniture & home furnishings (442), electronics & appliances (443), clothing & accessories (448), sporting goods, hobby, book, and music (451), general merchandise (452), office supply, stationery, and gift stores (4532) stores as well as on-line and catalog merchants (4541). [The numbers in parentheses are the NAICS codes used by the Census Bureau to classify businesses.]