E Commercibus Caveat Blowhardus

Tim Cavanaugh | August 13, 2009

Preparatory to next week's release of the Department of Commerce's second-quarter statistics on e-commerce, dig the results for the first quarter. The numbers [pdf] are not shocking: Retail sales from teh interwebs fell in Q4 2008 and Q1 2009. But what caught my eye was the column "E-commerce as a Percent of Total" (should that be percentage?) in Table 3.

The statistics go all the way back to Old '99, when Kozmo and Petopia still pointed the way toward a transfigured future in which all the lineaments of gratified desire would be available to every man woman and child on the planet at the speed of thought on steroids (or I guess back then we used to say "on crack"). They show the share of online retail growing strongly (from 0.6 percent of the total in Q4 1999 to 3.5 percent in Q1 2009) and more or less consistently.

But the e-commerce share still tops out at a small fraction of the total. In previous writings I cited the growth of e-commerce as a reason the commercial real estate (CRE) market faces both short-term and long-term illness. I still would advise nobody except my worst enemy to invest ceteris paribus in commercial real estate, for at least a few years. But I want to dial back my claim that the dawning of the age digitarius will seriously cut into a CRE recovery.  

 

Comments

hmm|8.13.09 @ 11:41PM|#

Completely off topic, but since you seem to be on a market/money/business beat. Insider sales have gone uberwonky, they went wonky in June and July, they continued on to uberwonky this month. Seems like a lot of people are heading for the hills.

WSJ finally hit on it

Zerohedge had another article on it today.

The faith, it seems to be following the hope and change.

hmm|8.13.09 @ 11:48PM|#

Do you cruise Russian video sites often?

should that be percentage?

yes. (calculator you need?)

hmm|8.13.09 @ 11:54PM|#

By commercial you are talking about retail space, correct? Brick and mortar. I've been digging around looking for PPE numbers on producing real estate and not retail space. It's a little easier to find retail space numbers, at least as far as I have seen. I wonder how much production based property is on the market. Michigan and car plants closing means large scale lots and a ton of acreage has to be hitting the market. I can think of at least 10 ten plus acre lots or larger (some much larger) vacant around here.

I never noticed your calling the end of B&R due to online sales. (I'm a lil new) I would have poked fun at you. Although I will bet there is a shift in this economy, as soon as people start buying again, toward online sales. Not one driven by consumers, but by producers and retailers.

hmm|8.14.09 @ 12:19AM|#

Here's a good place for week to week activity, easier than EDGAR imo

red=sale
green=buy
white=exercise

oh ya 4 peat on the postage.

Tim Cavanaugh|8.14.09 @ 12:45AM|#

Thanks for the link, hmm. No opinions on insider sales, but insiderscore.com looks pretty interesting. The site takes insider transaction information in the form of "unfiltered data providing little to no actionable properties," then uses a "proprietary scoring system" to "filter the wheat from the chaff." I need one of those!

Fist of Etiquette|8.14.09 @ 6:36AM|#

Michigan and car plants closing means large scale lots and a ton of acreage has to be hitting the market.

I'm not sure I'd be rushing to set up shop in Michigan, great deals on CRE or not.

KingShamus|8.14.09 @ 7:16AM|#

"I still would advise nobody except my worst enemy to invest ceteris paribus"

---------------------
I was told there would be no Latin in this interwebz blog thingy.

anarchus|8.14.09 @ 7:39AM|#

Semper licet cum grano salis audere.

robc|8.14.09 @ 8:18AM|#

1 thing I noticed from the table (adjusted). Despite the decrease in e-sales last quarter the percentage of the total went up. As it has EVERY SINGLE QUARTER since '99.

It reminds me of the craft beer numbers I see. Good times or bad, craft beer, as a percentage of total beer sales, keeps going up. Its got a higher percentage, 5-6 percent, as opposed to the 3.5% for online sales, but still otherwise similar.

Both are niche markets that arent going away. Is there a point in the future where their growth will flatten out? Sure, probably, but Ive seen no signs of it yet. Both are fundamental changes in consumer choice, even if its a niche fundamental change.

|8.14.09 @ 8:36AM|#

Oh wow, you have to admit that is like WAY cool!

RT
www.anon-web-tools.net.tc

Alan Vanneman|8.14.09 @ 9:06AM|#

E commerexcribalus, what? Lay off the crack, Tim.

|8.14.09 @ 10:08AM|#

I don't know if we're going to see a complete bubble-bursting event with commercial real estate like we did with residential, but the crash has already started.