Q1 E-Commerce $50.2 Billion (O2O at Least 10X Larger)

e-Commerce shopping cartYesterday comScore reported Q1 2013 e-commerce revenue figures for the US market:

Q1 2013 [e-commerce] sales grew 13 percent year-over-year to $50.2 billion, marking the fourteenth consecutive quarter of positive year-over-year growth and tenth consecutive quarter of double-digit growth. It was also just the second quarter on record to surpass $50 billion in spending.

comScore e-commerce

By comparison Q4 2012 e-commerce came in at roughly $56.8 billion according to comScore. However the US government said that Q4 2012 e-commerce revenues were $59.5 billion. Even so, they represented just 5.4% of total US retail for the quarter.

US govt ecommerce

The Q1 e-commerce numbers are probably closer to 5% than 6%. And because PC-based internet penetration has peaked, we’re likely to see PC-driven e-commerce top out at perhaps 8% – 10% at the very highest. Mobile commerce will grow and may push the overall number up slightly. But most “m-commerce” — at least for the immediate future — will be conducted on tablets rather than smartphones.

While e-commerce has become massive it’s still small when compared to the more than $4 trillion market for traditional, in-store retail sales. In addition, a much larger category than e-commerce is online- or digital-influenced offline transactions (O2O). While the precise O2O number isn’t known it’s at least 10X larger than e-commerce. This does not include all the service-business transactions that are researched online before being conducted in the real world.

O2O is where the “real action” is. However the segment has been largely invisible and mostly ignored by marketers because it’s so challenging to track and measure (other than by proxy or via coupons). However smartphones, their in-store usage and (one day) widespread use of mobile payments will make O2O tracking much more viable.

Here’s what a new mobile shopping report, released this week by Google, said about the most common in-store smartphone use cases:

  1. Price comparisons
  2. Finding offers and promotions
  3. Finding locations of other stores
  4. Finding hours

In addition to the spending data above, comScore cited the following other highlights in its Q1 release:

  • E-commerce accounted for 10.6 percent of discretionary dollars spent, the highest share on record
  • comScore’s new m-commerce spending estimates revealed that Apparel & Accessories was the highest grossing mobile (i.e. smartphone & tablet) product category with nearly $1 billion in Q1 sales
  • Nearly half (48 percent) of time spent in the Retail category occurred on mobile devices, with smartphones (34 percent) outpacing tablets (14 percent)

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