E-Commerce is Wiping Out Mall Retailers One by One. Here’s the Data
E-Commerce is Wiping Out Mall Retailers One by One. Here’s the Data by Wolf Richter for Wolf Street
Department store sales hit a new record low in the data going back to 1992.
E-commerce sales in the fourth quarter soared 12.1% from a year ago to a new record of $132.8 billion (seasonally adjusted), the Commerce Department reported this morning. For the whole year 2018, e-commerce sales blew through the $500-billion level for the first time, reaching $513.6 billion, up 14.2% or $64 billion from a year ago.
Not seasonally adjusted, e-commerce in Q4 jumped to $158.5 billion, 11.2% of total retail sales. E-commerce sales have doubled over the past five years.
E-commerce includes sales by the online operations of brick-and-mortar retailers, such as Macy’s, Walmart, and Best Buy, along with the sales of online-focused retailers, from small operations all the way up to Amazon.
People still say that e-commerce accounts for only 11.2% of total retail sales and therefore doesn’t matter. But this metric is misleading because e-commerce doesn’t yet seriously compete with a number of retailers, including gasoline stations, new and used auto dealers, and grocery and beverage stores. These three categories alone account for 52% of all brick-and-mortar sales.
Where the e-commerce bloodbath takes place is in other categories, including – with some choice casualties in parentheses:
- Department stores (Sears Holdings, Bon-Ton Stores)
- Book stores (see Borders, B. Dalton, Waldenbooks)
- Video stores (Blockbuster),
- Music stores (Tower Records)
- Hardware and hobby (Orchard Supply Hardware)
- Toy stores (Toys ‘R’ Us)
- Jewelry and accessory stores (Claire Stores)
- Sporting goods stores (Sports Authority)
- Electronics and appliance stores (Circuit City, CompUSA)
- Clothing and clothing accessory stores (Limited Stores, Pacific Sunwear, Aeropostale)
- Shoe stores (Payless Shoe Source)
The chart below shows who is winning this race. The blue line represents sales at these mall stores, and the red bars represent e-commerce sales. Note how resistant online sales were during the Great Recession: They dipped, but only briefly, and then continued soaring. But sales at mall stores took a deep dive during the Great Recession and have still not recovered from it, and will never recover from it: