Academic journal article ABA Banking Journal

The Changing Face of Retail Sales

Academic journal article ABA Banking Journal

The Changing Face of Retail Sales

Article excerpt

One recent trend within retail sales has been the sizable growth in nonstore sales. The latest Census report on monthly retail sales shows that nonstore sales rose 8.1% over last year's levels--far exceeding the growth rate for the other categories within retail sales. One key component of nonstore retail sales is online sales, or e-commerce, which has played an increasing role in driving overall sales in recent years. Online retailers are defined as retail outlets that have at least 50% or more business online. There has been a clear shift in the composition of retail sales toward greater e-commerce over the past decade, and this shift is spilling over to other areas of the economy. While we do not predict the demise of traditional brick-and-mortar retailers, new technologies will continue to put pressure on traditional retailers as they are forced to compete with their online counterparts.

After a dramatic decline during the Great Recession, retail sales growth has fluctuated near historical norms since 2010. More favorable economic conditions along with job gains helped to support the sustained growth in retail sales over the past several months. Even with sustained gains in retail activity, there has been a notable shift in the composition of total sales activity. Since the early 1990s, nonstore retail sales growth rates have been consistently above the rate of overall retail sales.

Although the recent economic recovery has contributed to these upward gains, the driving force behind the discrepancy of total retail sales and e-commerce sales growth has been the proliferation of new technologies. The increasing adoption of smartphones and tablets, as well as the rising number of internet users, has been crucial for accelerating e-commerce development. …

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