The Shifting Role of E-Commerce in the U.S. Economy

by Crestmark 11. August 2014 09:56

The Internet's impact on the U.S. economy is always growing. The share of online sales is slowly creeping up as the share of brick-and-mortar retailers continues to decline year over year.

E-tailers See Growth

A recent study by the Centre for Retail Research estimates that the online retail share of sales in the U.S. is expected to hit 11.6 percent this year. The figures for nine major countries, including G-8 nations France, Germany, Italy and the United Kingdom, were based on estimated online retail sales of goods. This is good news for U.S. e-tailers, who rely on 55 percent of the country's population to shop online. Online sales that were ordered via mobile devices are estimated to be as much as 13.8 percent for 2013, and are expected to rise to 19.9 percent this year. These figures didn't even include restaurant food, insurance, tickets, and gambling purchases.

                                                     

E-commerce Sales Are Up 

The U.S. Census Bureau has also announced that for the first quarter of 2014, the total retail e-commerce sales are up 2.8 percent over the fourth quarter of 2013. That's in increase of $71.2 billion. The estimate is adjusted for seasonal variation, not price changes. When compared to the first quarter of 2013, the increase is 15 percent. Unadjusted, the year-over-year comparison is an increase of 14.9 percent for e-tailers, and an increase of 2.2 percent for all retail sales.

Retail Storefronts Decline during E-commerce Rise

While e-commerce increases amid promising signs of an economic recovery in the U.S., more retailers are expected to close their brick-and-mortar storefronts. Staples, Inc. has announced that it plans to close 225 office supply stores by the end of next year. RadioShack, known for selling electronic gadgets and trending tech toys, announced in March that as many as 1,100 of its stores worldwide would close. In recent weeks, however, the company has decreased that number, citing disagreements with its lenders over the best way to manage its poor performance. According to reports by USA Today, RadioShack announced a loss of $191 million in the fourth quarter of 2013 over its 5,524 stores and dealer outlets. With 4,300 brick-and-mortar locations in the U.S., the company still plans to close a large number of stores, but no longer one-fifth of its locations.

The shift from retail storefronts to ecommerce business is hardly over, as there’s dust still left to settle in the broader shopping landscape. This transition is likely to bring more innovation to the marketplace, with brick and mortar stores finding new and creative ways to serve their customers, and internet based businesses working to take market share away from those same companies. This type of healthy competition is great for consumers though, and we look forward to seeing how things play out for the rest of 2014!     


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Economic Impact Abounds As NCAA Narrows to Final Four

by Crestmark 2. April 2014 09:42

March may be over, but the madness is in full swing as the NCAA tournament comes down to the Final Four. With barely a week to go in this annual fascination with college basketball, companies large and small are feeling the financial effects – some good, some not so much. Whether they're plagued by employees losing productivity or bolstered by a sudden influx of tournament-hungry patrons, the impact is undeniable. 

march madness

A Blow to Productivity

According to a recent report from outplacement and career transitioning company Challenger, Gray and Christmas, more than 50 million American workers are participating in office pools. While the annual practice may have cost companies approximately $1.2 billion in lost production time in the first week of the basketball tournament alone, the firm has cautioned corporate executives to avoid taking a hard line against bracket pools, friendly discussions at the water cooler and those taking time out for updates. A blow to employee morale and loss of camaraderie could be even more costly to a company's bottom line in the long run.

A Rise in Morale  

While the setback to productivity has declined as the basketball games have transitioned to evening and weekend play, the excitement of bracket busters and newly formed kinships at the office continues. Companies that allow employees to wear their favorite teams' colors or check office pool updates on the clock can still reap the benefits of enthusiastic workers. A pre-tournament survey by staffing services firm OfficeTeam found that 32 percent of the 300 senior managers surveyed believed that support of March Madness activities had a positive impact on worker morale, compared to just 20 percent in 2013.

A Boon to Business

On the other side of the financial fence, many merchants have seen a rise in business during the NCAA tournament. Hotels, restaurants and shops in host cities have experienced a surge in bookings, as have providers for air and ground  transportation. Mid-West bracket host city Indianapolis, for example, expected a $20 million spending impact from this past weekend's showdowns between the University of Kentucky and University of Louisville, as well as the University of Tennessee and University of Michigan. Kentucky eked out a win against Michigan amid an economic boost for Indianapolis merchants.

Meanwhile, restaurants and sports bars throughout the country offering televised games with food and drink specials are drawing record crowds of their own. In some cases, employees for these businesses are picking up extra shifts and working longer hours to meet the demand.  

With the semi-final games set for Friday, April 4 and the championship on Sunday, April 6, 2014, the eyes of millions of Americans are on the Florida Gators, Connecticut Huskies, Wisconsin Badgers and the Kentucky Wildcats. While there's no doubt that the economic impact of the NCAA tournament has created both winners and losers, only three games remain until it's back to business as usual.  

 

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