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Amazon lengthens online lead over Walmart and others

Traffic trends at Walmart and other major retailers declined in December even though e-commerce sales set new records in the fourth quarter and throughout 2012.

Online sales now account for 10% of total retail sales following a 15% increase in 2012 that caused sales to reach a new high of $186.2 billion, according to online measurement firm comScore Media Metrix. Fourth quarter online sales also set a record, increasing 14% to $56.8 billion to mark the first time quarterly online sales topped $50 billion. It was the thirteenth consecutive quarter of positive year-over-year growth and ninth consecutive quarter of double-digit growth.

However, traffic at Walmart.com during December 2012 declined to 52.2 million visitors compared to 55.8 million in December 2011, according to comScore’s top 50 Web properties report. Target.com was essentially flat with 37.4 million visitors while Bestbuy.com declined to 32.6 million visitors from 34.5 million and Sears dropped to 27.7 million from 29.8 million. Conversely, Amazon.com traffic during December increased to 120.8 million visitors from 114.7 million the prior year.

The correlation between a Web site’s visitors and actual sales is a bit murky, but more traffic is always a good thing. That’s true online or in a physical store even if average transaction sizes are growing and somewhat offsetting weaker traffic.

In Amazon’s case, the December traffic growth appeared to translate to sales. Fourth quarter sales increased 22% to $21.3 billion and for the year ended December 31 sales increased 27% to $61 billion. For the eighth consecutive year, Amazon was the top ranked company in holiday season customer satisfaction according to the ForeSee annual Holiday E-Retail Satisfaction Index.

Walmart and other conventional retailers don’t typically share their e-commerce sales although Walmart is due to report its fourth quarter results on February 21 and will presumably address the topic and its enhanced multichannel capabilities. Previously, the company has said it is difficult to break out a pure e-commerce sales figure due to the multichannel nature of its business. Assigning credit for a sale will become increasingly challenging for Walmart because products may be researched online, ordered via a mobile device and picked up in-store with Walmart’s Site-to-Store service or viewed in store and ordered online for home delivery.

Even so, the decline in December traffic at Walmart and other retailers is not an encouraging sign given Amazon’s performance and overall e-commerce sales growth.

"2012 was a year in which, for the most part, e-commerce continued to grow strongly, despite an uneven macroeconomic environment showing signs of recovery but also cause for continued concern," said comScore chairman Gian Fulgoni. "With e-commerce growth rates consistently in the mid-teens throughout the year, it is clear that the online channel has won over the American consumer and will increasingly be relied upon to deliver on the dimensions of lower price, convenience and selection."

The overall industry growth was driven by a combination of traffic and transaction size with a 6% increase in the number on online buyers and an 8% increase in spending per buyer. The top-performing online product categories were during the past year were digital content and subscriptions, consumer electronics, toys and hobbies, apparel and accessories and books and magazines, according to comScore. Each grew by at least 15%.