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E-retail sales jump 12% in Q1. How much of this increase would you attribute to rising fuel costs?
E-retail sales jumped 12% in Q1 over the same period last year. In addition, e-commerce registered a second consecutive quarter of double-digit growth over last year.
Do you think we can attribute any portion of this increase in e-retail sales to a substitution effect in reaction to the rising price of fuel? What other factors are at play here?
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2 Answers
Great question Courtney!
Answer: without a doubt! While the colossal growth of e-commerce can probably be attributed to a number of factors, I would propose that high fuel costs are one of the main drivers (pun intended!) of the growth in this sector. Obviously it's cheaper to sit in the comfort of your home or office and browse products online than it is to get in the car, drive x miles, park, and actually go shopping in traditional brick and mortar establishments. Then there is the simple ease of e-commerce: no dealing with pesky salespeople, no wasted time going store to store, ease of comparing like products or applications, etc. Moreover, expanding on the last point, buyers have never been more empowered with information, social networks, and options! Gone are the days of vendors finding the buyers first; Now enter the intelligent buyer, equipped with comparisons, references, market intelligence, and the ability to be heard.
Cost Savings + Ease/ Efficiency + Buyer Empowerment = why e-Commerce is exploding...
The reason I view fuel costs as a primary driver is because those Cost Savings are perhaps the most important ingredient to this formula. Would buyers opt for shopping online if the costs of doing so were comparable to traditional shopping? Maybe. But it probably wouldn't drive the trajectory of growth e-Commerce is currently experiencing in today's market.
I would not equate any...ok maybe 1% to gas. But gas is NOT the driver on this figure. Ecommerce was already projected to do double digit growth throughout the year 2011. Sound good on paper, but the reality is American's are looking for deals and the ECONOMY is driving them to online shopping.
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