Online retail sales down sequentially

For the first time since the U.S. Census Bureau began monitoring online retail sales in the last quarter of 1999, Internet commerce in the first three months of the year tumbled, both in terms of its overall numbers and as a percentage of the economy as a whole.

Internet retail sales dropped from US$8.7 billion in the final quarter of 2000 to $7 billion in the first quarter of this year, the agency reported. It also found that online retail sales dropped from 1.01 percent of all retail sales in the U.S. to 0.91 percent. In the year-ago quarter, e-commerce sales were 0.7 percent of total sales.

Even more striking was the fact that e-commerce sales dropped by a higher percentage, 19.3 percent, than total sales, 10.6 percent.

Rob Labatt, an analyst with Gartner Group Inc., said that over time the numbers may show that online retail is more mercurial than off-line. "It trended higher in the high times and now it's lower in the low times," he said.

Labatt noted that many Web businesses had closed in recent months and some customers might have seeped back into the brick-and-mortar arena. And he noted that some Internet markets may never be revived. "I don't see anyone leaping into the pet foods void," he said.

Overall Labatt wasn't surprised to see a first quarter dropoff in retail numbers, which is common after the holiday season. He estimated that online retail in 2001 would still show growth, though not at the triple-digit levels seen in previous years.

The survey included results from a poll of 12,000 retailers, and the listings didn't include numbers for online travel services, financial brokers and dealers and ticket sales agencies.

Including those figures might have painted a different picture, as the two largest Internet travel agencies posted significant growth in the first quarter of 2001.

Travelocity.com saw its gross travel bookings increase quarter to quarter from $696 million to $834 million, up 19.8 percent. Expedia saw its quarterly bookings increase from $475 million to $674 million, or 41.9 percent.

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