February 24, 2005 11:21 AM PST

Online shoppers jam virtual aisles

Online retailers racked up an estimated $18.4 billion in sales in the fourth quarter, 22 percent more than they did during the same period a year earlier.

Those figures, released Thursday by the U.S. Department of Commerce, confirm numerous reports indicating that shoppers are turning to the Web in ever-greater numbers, especially around the holidays.

The 2004 holiday season attracted about 17.7 million new online shoppers, according to a report from Jupiter Research. The research company predicts that even more people will log on to shop this year, fueling a 20 percent rise in e-commerce sales in 2005.

The Commerce Department report indicates that the Web is gaining a larger share of the overall retail market, which is expanding more slowly. Total retail sales in the United States grew only 8.2 percent in the fourth quarter, reaching an estimated $938.5 billion.

Fourth-quarter e-commerce growth was on par with growth for the whole year, which was 23.5 percent, the agency said. Total online sales in 2004 reached $69.2 billion, just shy of 2 percent of all retail sales in the country.

The Commerce Department gathers data from about 11,000 retail companies for its estimates. The department counts as e-commerce all orders placed over the Internet, extranets, e-mail or electronic data interchange networks. It excludes purchases from online travel services, financial brokers and dealers or ticket sales agencies.


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e-Commerce is not on equal playing field with brick'n mortar retailers
I think it is very unfair to compare e-Commerce with the brick and mortar retailers. e-Commerce has an unfair advantage being able to sell tax-free across state borders. Wonder if e-Commerce would be taking away the brick-n-mortar market share as quickly if buyers had to pay sales tax. It seems very unfair to the hard-working mom and pop shops all the way up to some established franchises to have to suffer because the government has allowed it to become an unfair playing field. The customer service and personal interactions.. relationships made with customers.. is being lost in this society.. memories of going shopping as a personal interactive experience that includes 'walking and getting some exercise' is giving way to either the couch potatoes or those who are too busy and need to 'slow down', and now e-commerce gives them more excuses to avoid interacting with real people. Do we really know the long-term effects of this move from personal interaction to keyboard interaction? I don't think anyone knows.. e-Commerce can be good and it can be bad.. depending on how you look at it. As a startup retailer myself, give me an equal playing field (with sales tax) and then let's see what the people decide.. I hope most would prefer the personal touch over the keyboard touch. I just hope many people don't have to lose their jobs, small businesses don't have to close their doors, before the government realizes it's not fair and finally decides to do something about it. Just make it fair! Make e-Commerce charge sales tax like any other brick'n mortar retailer has to.. then we'll see tough but fair competition, which is what I always thought was best for the consumer.
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slow down
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