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We've been told that the Internet is the new frontier for e-commerce. Online stores are booming. Bricks-and-mortar chains are beefing up their dot-com storefronts.
Don't get too excited just yet, though. Market research giant comScore is reporting that e-tail sales grew by a mere 9% during the third quarter when pitted against last year's showing. In fact, it's been more than two years since the last time that retail e-commerce grew faster than 10%.
Put in a more sobering way, China's economy in general is growing faster than online retail.
It's a pathetic sum, and stacked on top of the 2% decline that comScore recorded for last year's third quarter, we're talking about an embarrassing 7% spurt over two years.
I'm not buying it.
When it comes to dedicated e-tailers, the growth appears to be a lot heartier than 9%. Net sales at Amazon.com (Nasdaq: AMZN ) grew a scorching 39% during those same three months. Overstock.com (Nasdaq: OSTK ) clocked in with a hearty 27% top-line surge.
Let's see how some of the other stand-alone online retailers are projected to growth their revenue when they report in the coming days.
- drugstore.com (Nasdaq: DSCM ) : 12.4%
- Blue Nile (Nasdaq: NILE ) : 7.6%
- Vitacost.com (Nasdaq: VITC ) : 14.3%
- PC Mall (Nasdaq: MALL ) : 16.3%
- PC Connection (Nasdaq: PCCC ) : 32.3%
Outside of Blue Nile -- which naturally may be held back because of its high-end jewelry emphasis -- it seems as if everybody's growing faster than 9%. PC Mall and PC Connection also have mail-order roots which may actually be sandbagging their dot-com growth.
So what's going on here? Are the online pure plays simply growing faster than their privately held peers? Are bricks-and-mortar chains not putting enough muscle behind their online endeavors?
For investors, the real takeaway here is that comScore's data can be safely discarded. The real stars of e-tail are growing a lot faster than the market.
With drugstore.com reporting tonight and the others to follow, is it smart to buy into the e-tail stocks ahead of this year's holiday season? Share your thoughts in the comment box below.