Online Sales Rose 10% in Fourth Quarter

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While we wait for next week’s report on same-store sales from some of the country’s chain stores, we can chew on some data released Thursday morning by IBM Digital Analytics Benchmark. The bottom line number is that online sales rose 10.3% in the fourth quarter of 2013, when compared with the same period in 2012.

What is most interesting about the IBM report are some of the details. Online traffic from mobile devices rose 40% year-over-year and accounted for about 35% of all online traffic in the quarter. Mobile sales rose 46%, to comprise 16.6% of all online sales in the fourth quarter.

The data also indicate that consumers use smartphones to browse and tablets to make purchases. Smartphone browsing accounted for 21.3% of all traffic, compared with 12.8% total browsing traffic from tablets. But tablets accounted for 11.5% of all online purchases, compared with 5% of purchases from smartphones. Tablet users also spent more money per order: $118.09, compared with $104.72 for smartphone buyers.

Consumers using the Apple Inc. (NASDAQ: AAPL) iPhone or iPad and iOS operating system account for about 12.7% of all online sales, compared with 2.6% of purchasers who use the Android operating system from Google Inc. (NASDAQ: GOOG). And iOS users also spent more money per purchase: $115.42 per order, versus $83.56 per order by Android.

These numbers lead to all sorts of speculation. The first is that Apple devices are used by a better-heeled crowd than are Android-based devices. This could be due to the relatively high cost of iPhones and iPads, which would suggest that Apple device owners have more cash to spend.

The difference could also be due to an age difference. Android devices have a stronger appeal to younger users, and again this might be a function of cost. Parents buy iPhones and iPads for themselves and cheaper Android devices for their kids. Those kids typically have less money to spend, but that does not keep them from browsing.

And the social influence was definitely tilted toward Facebook Inc. (NASDAQ: FB). Compared with Pinterest, consumers referred to an online retail site from Facebook averaged a paltry $60.48 per order, compared with $109.93 for Pinterest. But Facebook converted referrals to sales at a rate 3.5 times higher than Pinterest. That suggests that recommendations from Facebook friends carry some serious weight.

Other observations worth noting from IBM’s fourth-quarter summary:

  • Online sales at department store websites rose 62.8% year-over-year and mobile sales rose nearly 50%.
  • Health and beauty sales rose 14.7%, with mobile sales up 81.7%.
  • Sales of home goods rose more than 46% and mobile sales were up 38%.
  • Apparel sales rose 10.2%, with mobile sales up 54.5%.

The growth in mobile traffic and sales can be partially attributed to a much lower starting point. But with growth rates like these, retailers will certainly be paying more attention to advertising placements. It will be interesting to see if Facebook and Twitter Inc. (NYSE: TWTR) go for volume or premium pricing in the coming year.

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