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Etailing Sales Flat in Quarter

Online sales were flat in the first quarter and might be stabilizing.

Online sales were flat in the first quarter and might be stabilizing, according to data released Wednesday by comScore Inc. The snapshot presented a different and worse picture of the state of online retail than earlier estimates put out by the National Retail Federation and Forrester Research Inc.

U.S. consumers bought $31 billion worth of goods in the first quarter, the same amount they bought in the same period the year before, comScore said. (The number excludes travel, autos, auctions and large corporate purchases.)

In contrast, Forrester’s prediction for all of 2009 shows online retail growing at 11 percent, down from growth of 13 percent the year before. One point of agreement between the two sources is that e-tail is doing better than off-line retail.

ComScore believes the economy may be improving. Although first-quarter sales were flat, they were better than in the fourth quarter, when growth dipped into negative territory for the first time, falling 3 percent, according to comScore.

“The fact that we’re back to about even for Q1 tells us that consumer confidence is picking up,” said comScore analyst Andrew Lipsman. “Maybe some fears have been mitigated that the economy is shaking out a bit. That said, people are not yet at the point where they are heavily spending their discretionary income.”

Online shopping patterns have changed dramatically as the economy has worsened, according to the firm. In 2007, growth rates were as high as 23 percent each quarter. Growth gradually slowed to the low double digits in the first half of 2008 before retreating in the fourth quarter.

Lipsman declined to predict future sales, but said an eventual rebound is possible.

“In this economy, it’s a bit foolhardy to prognosticate too much because the economic instability is still shaking out and there are a lot of factors that are still unpredictable,” he said. “The fact that growth rates have picked up is a positive sign we might be headed in the right direction. When the economy does get to the point when we’re in recovery, it’s safe to say we’ll be getting back to not just positive growth rates for e-commerce, but pretty healthy positive growth rates like we had in the past. It may take time to get back into the mid or upper teens, but once the economy does rebound, double-digit growth rates are certainly in the realm of possibility.”

The two research companies rely on different methodologies. In its most recent study, Forrester surveyed a panel of executives at 117 large online retailers. ComScore uses software to track the dollar amount of actual sales executed by more than a million Internet users in the U.S.

ComScore believes online sales account for about 8 percent of total sales in the U.S. “We don’t know if there’s an actual threshold beyond which online will not become a bigger piece of the pie, but I don’t think 15 percent of total retail is out of the question,” said Lipsman. “There’s a cultural shift at play.”