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Avoid Retail’s Fake News Purveyors

By Robert Hetu | April 03, 2019 | 0 Comments

Retail Trends

Yesterday I saw an article that really grabbed my attention.  @CNBC published the headline “Online shopping officially overtakes brick-and-mortar retail for the first time ever” (recently the title has changed). Imagine my surprise, as I knew that ecommerce was 14.3% of US retail sales in 2018. Obviously I missed the culmination of the retail apocalypse if this shift had occurred.  Upon further investigation, however, I realized that it was just more sloppy analysis and fake news by another financial reporter.

How to read reports and avoid fake news

The claim in the article was based on a US Government publication Monthly Retail Trade . To make the comparison in the article, the author uses February’s total non-store retailer sales and compares them to the total sales from 452 general merchandise stores.

General Merchandise Stores $59,739
Non-Store Retailers $59,768

While this is an interesting factoid, correlation does not indicate causation. This is obviously a comparison of apples and oranges.  As we all know, pure ecommerce retailers sell products from every category. We also know that store based specialty retail has been growing at the expense of general merchandise for years. The total retail sales for February, excluding auto, parts and fuel, was $362,105. Using this total, non-store retailers provided 16.5% of retail sales in February. This is likely slightly overstated but it is in line with the 2018 annual growth of 15.5%.

Avoid retail fake news
US February Retail Sales

 

Ecommerce is important, this is not fake news

The rapid growth of ecommerce has changed the face of retail like nothing since the invention of the shopping mall or the mega store. So why to I care what this report said? My concern is the same as I have opined before, headlines like this can cause investors and others to drive retailers to make less than optimal decisions.  Gartner’s position is that ecommerce will very soon cease to be a stand alone differentiator in the marketplace.  That does not mean that its not important, it means that its becoming ubiquitous.

Ecommerce retailers continue to invest in stores, this is not fake news

The result is most pure ecommerce retailers are investing in physical retail outlets.  Amazon bought Whole Foods and is rumored to be opening hundreds of grocery stores.  Wayfair just announced its first store opening in Massachusetts. There a myriad examples of this online to offline expansion. This is on top of the widely expanding use of offline to online by traditional retailers.

Shame on @CNBC and others for sloppy journalism that leads to fake news.

 

 

 

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