While overall retail sales were disappointing, online sales for 10 of the largest web merchants grew by a robust 29% year-over-year during the recent holiday season, reports Chase Paymentech, which processes payments for those e-retailers. Separately, web-only jewelry retailer Blue Nile says its fourth quarter sales were up 24% over 2006.
The online results stand out amid the weak results for retailers overall. The National Retail Federation says retail sales for November and December totaled $469.9 billion, a 3% increase from 2006. That fell short of the trade group's projection of 4% growth in holiday spending, and represented the smallest increase since 2002.
But it was a different story online, at least for the big retailers in the Chase Paymentech Pulse Index. Those retailers realized $5.482 billion in net sales on 108.4 million transactions, up 29% in both dollar and transaction volume from $4.239 billion and 83.9 million transactions for the same online retailers in 2006.
"The tremendous year-over-year growth numbers clearly indicate that online commerce is attracting more and more consumers, particularly in a challenging economic environment," says Mike Duffy, president and CEO of Chase Paymentech.
The Chase Paymentech results suggest that better results for some of the biggest online merchants than for web retailers as a whole. Web measurement firm comScore Inc. says online retail sales grew 19% in November and December. The Chase Paymentech Pulse Index is based on sales by 10 of the 30 largest online retailers according to the rankings in the Internet Retailer Top 500 Guide.
The busiest period for the merchants tracked was Dec. 11-14 when the 10 e-retailers generated $598.1 million in sales. The busiest single day was Tuesday, Dec. 18, with $168.9 million in sales and 3.05 million transactions. The top day in terms of average ticket was Wednesday, Nov. 28, at $62.57. Wednesday was the busiest day of the week, averaging $103.7 million in sales over the holiday period of Nov. 5-Jan. 7, while Sunday was the slowest, averaging $61.5 million, Chase Paymentech says.
Blue Nile, No. 49 in the Internet Retailer Top 500 Guide, reported only its year-over-year fourth quarter growth, and will report its full fourth quarter results Feb. 12. CEO Mark Vadon says he is extremely pleased with the results, especially in light of the overall economic malaise.
"2007 was a great year for Blue Nile, and the holiday quarter was no exception," Vadon says. "While we have not previously released our fourth quarter sales results in advance of our earnings announcement date, we felt it was important to share this information given the industry data that has been released recently. Over the past week, a number of large jewelry retailers have reported negative same store results for the holiday season."
Among the brighter spots in the National Retail Federation report of overall retail sales were health and personal care stores, which gained 3.7% over 2006, and general merchandise stores where sales grew 2.1%. Among the weaker sectors were clothing and clothing accessories stores, furniture and home furnishings stores, and department stores, NRF says. NRF is projecting 3.5% growth in overall retail sales in 2008.
A separate report from research firm ShopperTrak RCT Corp. says in-store retail sales grew 4.5% although foot traffic to stores declined 2.7% in November and December. Throughout 2007 consumers visited stores less often, but on average spent more on each visit, ShopperTrak says. ShopperTrak collects data from more than 50,000 retail and shopping mall locations.
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