The Courier Express and Postal Observer has calculated that the share of retail sales that are delivered direct to consumers in May hit 21.3% of all deliverable retail sales. This figure is based on the latest release of the Census Bureau’s monthly retail sales report released on July 16th. Over the first five months sales requiring delivery grew by 16.3% over year ago levels. Current trends indicate that the share of deliverable retail sales that the Postal Service, FedEx, United Parcel Service and regional carriers deliver will hit at least 24% by January of next year by the end of the decade one-third or more of retail spending of consumers that could be delivered will be delivered.
The following chart shows the trend in the share of retail sales that require delivery from both firms that only sell directly to the consumer through all direct-marketing modes (i.e. e-commerce, direct mail, catalogs, magazines, telephone, and television) and those that generate most of their sales through brick and mortar outlets.
The chart illustrates that share of retail sales that are delivered have been growing exponentially since 1999. The share does vary seasonally with higher than trend values common in the pre and post-holiday periods (i.e. September, October and January and below trend values in May, June and July.
Measurement of a Deliverable Retail Sales Proportion Is More Relevant than the Census Bureau’s E-commerce Sales Proportion for Retailers and Carriers
The Census Bureau estimates the e-commerce proportion of retail sales quarterly in its Quarterly Retail E-Commerce Sales Report. The most recent report for the 1nd quarter of 2012, reported that 4.9% of all retail sales. While, the Census Bureau’s e-commerce statistics illustrates the trend toward delivered retail, it understates the extent that delivery of retail sales affects he portion of the retail marketplace that consumers are most likely to have viable brick and mortar and delivered retail options. For carriers, a measure of delivered retail sales is also more useful as their focus is on the rate of change in business-to-consumer deliveries. Tracing the rate of growth of only e-commerce sales misses a significant share of the sales that their customers expect them deliver and could cause them to mis-estimate the growth in their network that will be required to handle the growth in deliveries to consumers
The deliverable retail sales ratio depicted is a better measure than the Census Bureau’s e-Commerce sales ratio in three import respects.
- The deliverable retail sales measure includes the approximately 30% of all retail sales by direct merchants sell that are not sold via one of the Census Bureau’s defined e-commerce channels. According to the Census Bureau, e-commerce includes only sales of goods and services where an order is placed by the buyer or price and terms of the sale are negotiated over an Internet, extranet, EDI network, electronic mail or other online system. Payment may or may not be made online. Sales that are made offline using older direct marketing channels including catalogs, direct mail, television, radio, magazine ads a and telephone sales.
- The Census Bureau’s e-commerce sales measure excludes retail categories that generate a large number of parcel deliveries. The Census Bureau’s e-commerce sales figure excludes a significant dollar amount of sales for the following product categories: Drugs, health aids, and beauty aids ($71 million); jewelry, collectibles, auto parts and accessories, hardware, and lawn and garden equipment ($15 million); appliances, computer hardware, computer software, and consumer electronics ($17 million); and Clothing and shoes ($6 million). [Source: Census Bureau e-stat Report for 2010] From a shipping perspective, the excluded items are those that are lighter in weight than the average business-to-consumer shipment and are most likely to be delivered by the Postal Service even if another carrier sells the delivery service to the retailer
- The Census Bureau’s e-commerce ratio uses all retail sales in its denominator, while the denominator used to measure deliverable retail sales excludes sales at brick and mortar outlets that either cannot be delivered at all or are rarely delivered by FedEx, United Parcel Service, the U.S. Postal Service or a regional carrier. Excluded are retailers that sell motor vehicles and motor vehicle parts (441), building materials and garden equipment and supplies stores (444), food and beverage stores (445), health and personal care stores (446), and gasoline stations (447). [The numbers in parentheses are the NAICS codes used by the Census Bureau to classify businesses.]