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The monthly ritual that encapsulates the failing retail results of everyone but WalMart were released yesterday. Retailers from  Abercrombie & Fitch to Zumiez got whacked in February, which is no surprise. But one thing is sorely missing from many retail reports:  the importance of online sales.

The metric known as same-store sales defines success or failure in the retail industry. They're measured year-over-year and are subject to random events and economic conditions more than they are attributable to good leadership or good strategy. But online sales rarely, if ever, take the lead in the conversation. Ecommerce for many retailers is just as indicative of their overall performance as same store sales.

Ecommerce numbers get the short shrift because Wall Street analysts don't like change. They want to compare same store sales because that's the way things have always been done. But as retailers spend more money on social media applications, expensive graphic interfaces, payment systems, and real-time inventory updates, the return they get from those investments should be more visible and more important.

Many companies do report online sales quarterly. But monthly online data will also help the industry define best practices. Example: Urban Outfitters upgraded its site last year to allow shoppers to compare colors and different outfits in the same window as the checkout interface. The company said the application increased engagement metrics. We also know that their Q4 sales were up three percent online, exactly the same as their same store sales. Is that a good number or a bad number? Any positive movement in this economy is good. But a three percent year-to-year growth for ecommerce for a teen brand needs to be explained. However, kudos to Urban for breaking the numbers out.

WalMart trots out its CEO every month to attribute their sales increases to something other than their cost-cutting and deep discounting. This month it was all about steady gas prices adding fuel to disposable income. No news reports detailed their online performance, and the company does not break it out.


Published 6 March, 2009 by John Gaffney

John Gaffney is US Editor at Econsultancy. Follow him on Twitter

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