e-Commerce Counsel Rest Assured: Gov't. Says e-Comm. Spending Up Again

Okay, so this isn't like sitting for the nation's toughest bar exam, but here's a question to break up your professional-development reading a bit:

What goes up from quarter to quarter and, in a sign of our times, doesn't appear to be headed down any time soon?

Take a sip of coffee, scratch your head, chew your pen for a few seconds … tap your foot (hey ' no looking ahead to the next paragraph).

Give up?

It's the U.S. level of e-commerce activity, well ' we wouldn't say stupid, but you get the idea.

The U.S. Census Bureau reported Feb. 17 that its estimate of all U.S. e-commerce sales for the fourth quarter of last year was ' hold onto your billing sheet ' $22.9 billion, an uptick of 3.3% from the healthy third-quarter estimate, and a leap of 23% from the fourth quarter of 2004.

The total estimate of all retail commercial activity for the fourth quarter is $960.3 billion ' with e-commerce sales for the quarter accounting for 2.4% of all sales,

The estimated fourth-quarter e-commerce total comes in at about $600 million more than the estimated third-quarter estimate of $22.3 billion for e-tail activities.

The Census Bureau notes that the figures are adjusted for what the government calls “seasonal variation and holiday and trading-day differences,” but not for price changes.

The Bureau's fourth-quarter report offers consumers and business owners, along with e-commerce lawyers, a snapshot of e-commerce through last year. The Census Bureau put total e-commerce sales for 2005 at an estimated $86.3 billion. That tally is up 24% from the estimated total e-commerce of 2004.

Total retail sales in 2005 also were up from the previous year ' by 7.2% ('0.3%, the government notes). For the span of the calendar last year, the government says that e-commerce sales accounted for 2.3% of total sales, with the same category of estimated sales for 2004 at 2%. The percentage of increase in estimated e-commerce sales in 2005 from 2004 was 6, the Census Bureau reports, with the estimated variation of error in the year-to-year percentage increase at about a third of a tenth of a percent.

e-Commerce ' Not For The
Savviest, Bravest Alone

The Census Bureau's figures of e-commerce activity in the United States don't report Internet transactions exclusively, but the Internet is a prime factor in the increase in electronic transactions, Internet analysts say. Along with the increased activity, however, comes increased threats, such as from malicious Internet viruses and other devices that infect consumer and business computers, from bots to Trojan horses to spyware.

And an increased sophistication in invasive program design, and the focus on such widespread tools as Internet Explorer, add to the trepidation of some people about using the Internet and other electronic conduits to conduct business. Even so, the lure of the ease of e-commerce overcomes many people's fear of invasive software, Internet service providers and technology experts say.

A case in point is a study by online-activity monitor JupiterRe-search that shows an upswing in online consumer purchasing, and in using the Internet to research or otherwise facilitate offline transactions. In fact, Jupiter's recent research estimates that by 2010, 71% of people who use the Internet will put the network to use to buy or help them buy products or services. Last year, an estimated 65% of people who use the Internet employed it to make or assist in making purchases, with Jupiter estimating the value of such buying will reach $95 billion this year ' and a little more than a quarter of people who surf the Web using the Internet to facilitate or influence purchasing.

But by 2010, when the Internet will have been a readily accessible tool available to many consumers for making or deciding on purchases for only about a decade, JupiterResearch figures that up to 71% of people who go online will use the Internet for purchasing, or as one channel in a multi-level scheme for purchasing products or services, or deciding whether to buy them.

While the Census Bureau makes no estimates in its quarterly e-commerce and retail reports of the number of people who might use the Internet to make purchases or to help them decide to make them, it goes without much thought that the rapid development and proliferation of Internet buying is a boon to the legal profession: With more online activity, businesses must meet more regulatory compliance and establish protocols for ' and answer problems with ' retaining, storing, finding and fixing data in some presentable form if required, such as for discovery, records, paper and electronic.

The total of e-commerce activity in its own right, and as a percentage of total retail commerce, has risen unflaggingly since the second half of 1999, when the government began tracking such commerce.

Non-adjusted Figures

Without adjustments, the figures come out this way:

• Fourth-quarter 2005 total estimated sales, $26.5 billion, up 27.5% ('2.1%) from the third quarter;
• Fourth-quarter 2005 e-commerce estimate is up 23.4% ('3.8%) from the fourth quarter of 2004;
• Estimated total retail sales for the fourth quarter are up 6% ('0.3%) from the same quarter of 2004; and
• e-Commerce estimates for the fourth quarter were 2.6% of total fourth-quarter sales.

Third-Quarter Recap

The estimated total net value of retail e-commerce sales in the third quarter was $22.3 billion, according to the Census Bureau.

That figure, which accounts for 2.3% of all retail sales, is about $1 billion more than the estimated retail e-commerce activity in the second quarter.

Third-quarter e-retail sales came in 5.7% higher than for the second quarter.

Total estimated retailing racked up $957.9 billion, the government says.

The Census Bureau notes that the figures are adjusted for what the government calls “seasonal variation and holiday and trading-day differences,” but not for price changes.

Census Bureau figures show a healthy jump in estimated e-commerce activity in the retail sector compared to the same time last year ' with last year's third-quarter e-commerce estimate 26.7% above the same quarter in 2004, with total retail sales up by about 8.5%. Percentage-wise, the third-quarter increase over 2004's third-quarter estimated total was 1.7.

The Bureau points out that the third-quarter e-commerce estimate is plus or minus 4.5%, while the possible deviation for the total estimate of retail activity for the third quarter is half a percentage point.

In what seems a quarterly ritual since the Census Bureau began tracking e-commerce retail activity in 1999, the third-quarter adjusted estimate appears to be the largest to date, with the tally about $5 billion above the highest recent adjusted or unadjusted estimates ' preliminary or revised.

The government doesn't comment in the e-stats report on what the figures mean, but third quarter results seem to indicate a steadily rising retailing e-commerce totals since the second half of 1999 ' as an economic activity in its own right, and as a percentage of total retail sales in the United States. It's an easy conclusion, supported by reports from analysts and other e-commerce and technology observers, that despite some recent dips in consumer confidence in buying products or services online that were caused by information-security compromises last year, increasing access to Internet connections is fueling consumers' foray and companies' voyage into e-commerce.

The government says that not accounting for seasonal variation and holiday and trading-day differences, estimated U.S. retail e-commerce sales for the third quarter last year totaled $20.8 billion, up 5.1% ' give or take 1.7% ' from the second quarter. That figure puts last year's total e-commerce non-adjusted estimate 26.4% ' plus or minus 4.5% ' past the third quarter of 2004.

A Note On Adjusted Estimates

The Census Bureau notes that its e-commerce and overall retail quarterly reports adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, are figured with quarterly e-commerce sales estimates for the fourth quarter of 1999 to the current quarter as input to the Bureau's X-12 ARIMA program to derive the adjusted estimates.

For sales figures, the Bureau derives quarterly adjusted estimates by coming up with sums of adjusted monthly sales estimates for each respective quarter. Seasonal adjustment of estimates is an approximation, the government notes, that is based on current and past experiences in compiling retail sales figures and estimating volumes of activities.

Counsel who compile estimated sales figures for e-commerce clients and who might use that data to advise them can get information on the X-12 ARIMA program at www.census.gov/srd/www/x12a/.

e-Commerce Defined,
And A Bit On The Figures

The government considers e-commerce to be any sale of services or goods conducted when a buyer places an order, or negotiates sale price and terms, via Internet, extranet, electronic data interchange (EDI), e-mail or other online channel. Payment needn't be made online.

Estimates of total and e-commerce retail sales are based on figures from the Bureau's Monthly Retail Trade Survey (MRTS) and the Bureau's, and other agencies,' administrative records. Estimates and final sales figures are taken from MRTS samples.

The Census Bureau notes on its Web site (www.census.gov) that: “A stratified simple random sampling method is used to select approximately 11,000 retail firms whose sales are then weighted and benchmarked to represent the complete universe of over two million retail firms.”

The Bureau's figures are based on a sample that is itself based on probabilities, and reflects all firms with employees that conduct retail sales that fit the definition maintained by the North American Industry Classification System, which is known as NAICS. All retailers sampled by the survey are included whether or not they conduct e-commerce. Not classified as retail establishments, and as not providing retail services, are online travel sites, financial brokers and financial dealers, and ticket agencies, the Bureau notes.

Non-employer establishments are also represented in the MRTS sampling via benchmarks of previous yearly survey estimates.

The Census Bureau says that the survey is updated regularly to “account for new retail employer businesses (including those selling via the Internet), business deaths, and other changes to the retail business universe.”

The government requests that firms report monthly e-commerce statistics separately from traditional sales.

The Census Bureau plans to release estimated e-commerce retail figures for the second quarter on May 18.

Estimate Reliability

Because estimates in the Census Bureau's reports are based on a sample survey, the figures may contain sampling error and non-sampling error, the government says.

The Census Bureau defines sampling error as the difference between the estimate and the result that would be obtained from a total enumeration of the population conducted under the same survey conditions. The error occurs, the Bureau says on its Web site, because only a subset of the entire population is measured in a sample survey.

Standard errors and coefficients of variation are estimated measures of sampling variation.

Upcoming Data

The Census Bureau says that it intends to revise its quarterly retail e-commerce estimates along the lines of the results reported in the 2004 Annual Retail Trade Survey. Unadjusted and adjusted estimates will be revised for 1999 through the fourth quarter of 2005, the government says. The Bureau expects to release the revised data on May 18.

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Okay, so this isn't like sitting for the nation's toughest bar exam, but here's a question to break up your professional-development reading a bit:

What goes up from quarter to quarter and, in a sign of our times, doesn't appear to be headed down any time soon?

Take a sip of coffee, scratch your head, chew your pen for a few seconds … tap your foot (hey ' no looking ahead to the next paragraph).

Give up?

It's the U.S. level of e-commerce activity, well ' we wouldn't say stupid, but you get the idea.

The U.S. Census Bureau reported Feb. 17 that its estimate of all U.S. e-commerce sales for the fourth quarter of last year was ' hold onto your billing sheet ' $22.9 billion, an uptick of 3.3% from the healthy third-quarter estimate, and a leap of 23% from the fourth quarter of 2004.

The total estimate of all retail commercial activity for the fourth quarter is $960.3 billion ' with e-commerce sales for the quarter accounting for 2.4% of all sales,

The estimated fourth-quarter e-commerce total comes in at about $600 million more than the estimated third-quarter estimate of $22.3 billion for e-tail activities.

The Census Bureau notes that the figures are adjusted for what the government calls “seasonal variation and holiday and trading-day differences,” but not for price changes.

The Bureau's fourth-quarter report offers consumers and business owners, along with e-commerce lawyers, a snapshot of e-commerce through last year. The Census Bureau put total e-commerce sales for 2005 at an estimated $86.3 billion. That tally is up 24% from the estimated total e-commerce of 2004.

Total retail sales in 2005 also were up from the previous year ' by 7.2% ('0.3%, the government notes). For the span of the calendar last year, the government says that e-commerce sales accounted for 2.3% of total sales, with the same category of estimated sales for 2004 at 2%. The percentage of increase in estimated e-commerce sales in 2005 from 2004 was 6, the Census Bureau reports, with the estimated variation of error in the year-to-year percentage increase at about a third of a tenth of a percent.

e-Commerce ' Not For The
Savviest, Bravest Alone

The Census Bureau's figures of e-commerce activity in the United States don't report Internet transactions exclusively, but the Internet is a prime factor in the increase in electronic transactions, Internet analysts say. Along with the increased activity, however, comes increased threats, such as from malicious Internet viruses and other devices that infect consumer and business computers, from bots to Trojan horses to spyware.

And an increased sophistication in invasive program design, and the focus on such widespread tools as Internet Explorer, add to the trepidation of some people about using the Internet and other electronic conduits to conduct business. Even so, the lure of the ease of e-commerce overcomes many people's fear of invasive software, Internet service providers and technology experts say.

A case in point is a study by online-activity monitor JupiterRe-search that shows an upswing in online consumer purchasing, and in using the Internet to research or otherwise facilitate offline transactions. In fact, Jupiter's recent research estimates that by 2010, 71% of people who use the Internet will put the network to use to buy or help them buy products or services. Last year, an estimated 65% of people who use the Internet employed it to make or assist in making purchases, with Jupiter estimating the value of such buying will reach $95 billion this year ' and a little more than a quarter of people who surf the Web using the Internet to facilitate or influence purchasing.

But by 2010, when the Internet will have been a readily accessible tool available to many consumers for making or deciding on purchases for only about a decade, JupiterResearch figures that up to 71% of people who go online will use the Internet for purchasing, or as one channel in a multi-level scheme for purchasing products or services, or deciding whether to buy them.

While the Census Bureau makes no estimates in its quarterly e-commerce and retail reports of the number of people who might use the Internet to make purchases or to help them decide to make them, it goes without much thought that the rapid development and proliferation of Internet buying is a boon to the legal profession: With more online activity, businesses must meet more regulatory compliance and establish protocols for ' and answer problems with ' retaining, storing, finding and fixing data in some presentable form if required, such as for discovery, records, paper and electronic.

The total of e-commerce activity in its own right, and as a percentage of total retail commerce, has risen unflaggingly since the second half of 1999, when the government began tracking such commerce.

Non-adjusted Figures

Without adjustments, the figures come out this way:

• Fourth-quarter 2005 total estimated sales, $26.5 billion, up 27.5% ('2.1%) from the third quarter;
• Fourth-quarter 2005 e-commerce estimate is up 23.4% ('3.8%) from the fourth quarter of 2004;
• Estimated total retail sales for the fourth quarter are up 6% ('0.3%) from the same quarter of 2004; and
• e-Commerce estimates for the fourth quarter were 2.6% of total fourth-quarter sales.

Third-Quarter Recap

The estimated total net value of retail e-commerce sales in the third quarter was $22.3 billion, according to the Census Bureau.

That figure, which accounts for 2.3% of all retail sales, is about $1 billion more than the estimated retail e-commerce activity in the second quarter.

Third-quarter e-retail sales came in 5.7% higher than for the second quarter.

Total estimated retailing racked up $957.9 billion, the government says.

The Census Bureau notes that the figures are adjusted for what the government calls “seasonal variation and holiday and trading-day differences,” but not for price changes.

Census Bureau figures show a healthy jump in estimated e-commerce activity in the retail sector compared to the same time last year ' with last year's third-quarter e-commerce estimate 26.7% above the same quarter in 2004, with total retail sales up by about 8.5%. Percentage-wise, the third-quarter increase over 2004's third-quarter estimated total was 1.7.

The Bureau points out that the third-quarter e-commerce estimate is plus or minus 4.5%, while the possible deviation for the total estimate of retail activity for the third quarter is half a percentage point.

In what seems a quarterly ritual since the Census Bureau began tracking e-commerce retail activity in 1999, the third-quarter adjusted estimate appears to be the largest to date, with the tally about $5 billion above the highest recent adjusted or unadjusted estimates ' preliminary or revised.

The government doesn't comment in the e-stats report on what the figures mean, but third quarter results seem to indicate a steadily rising retailing e-commerce totals since the second half of 1999 ' as an economic activity in its own right, and as a percentage of total retail sales in the United States. It's an easy conclusion, supported by reports from analysts and other e-commerce and technology observers, that despite some recent dips in consumer confidence in buying products or services online that were caused by information-security compromises last year, increasing access to Internet connections is fueling consumers' foray and companies' voyage into e-commerce.

The government says that not accounting for seasonal variation and holiday and trading-day differences, estimated U.S. retail e-commerce sales for the third quarter last year totaled $20.8 billion, up 5.1% ' give or take 1.7% ' from the second quarter. That figure puts last year's total e-commerce non-adjusted estimate 26.4% ' plus or minus 4.5% ' past the third quarter of 2004.

A Note On Adjusted Estimates

The Census Bureau notes that its e-commerce and overall retail quarterly reports adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, are figured with quarterly e-commerce sales estimates for the fourth quarter of 1999 to the current quarter as input to the Bureau's X-12 ARIMA program to derive the adjusted estimates.

For sales figures, the Bureau derives quarterly adjusted estimates by coming up with sums of adjusted monthly sales estimates for each respective quarter. Seasonal adjustment of estimates is an approximation, the government notes, that is based on current and past experiences in compiling retail sales figures and estimating volumes of activities.

Counsel who compile estimated sales figures for e-commerce clients and who might use that data to advise them can get information on the X-12 ARIMA program at www.census.gov/srd/www/x12a/.

e-Commerce Defined,
And A Bit On The Figures

The government considers e-commerce to be any sale of services or goods conducted when a buyer places an order, or negotiates sale price and terms, via Internet, extranet, electronic data interchange (EDI), e-mail or other online channel. Payment needn't be made online.

Estimates of total and e-commerce retail sales are based on figures from the Bureau's Monthly Retail Trade Survey (MRTS) and the Bureau's, and other agencies,' administrative records. Estimates and final sales figures are taken from MRTS samples.

The Census Bureau notes on its Web site (www.census.gov) that: “A stratified simple random sampling method is used to select approximately 11,000 retail firms whose sales are then weighted and benchmarked to represent the complete universe of over two million retail firms.”

The Bureau's figures are based on a sample that is itself based on probabilities, and reflects all firms with employees that conduct retail sales that fit the definition maintained by the North American Industry Classification System, which is known as NAICS. All retailers sampled by the survey are included whether or not they conduct e-commerce. Not classified as retail establishments, and as not providing retail services, are online travel sites, financial brokers and financial dealers, and ticket agencies, the Bureau notes.

Non-employer establishments are also represented in the MRTS sampling via benchmarks of previous yearly survey estimates.

The Census Bureau says that the survey is updated regularly to “account for new retail employer businesses (including those selling via the Internet), business deaths, and other changes to the retail business universe.”

The government requests that firms report monthly e-commerce statistics separately from traditional sales.

The Census Bureau plans to release estimated e-commerce retail figures for the second quarter on May 18.

Estimate Reliability

Because estimates in the Census Bureau's reports are based on a sample survey, the figures may contain sampling error and non-sampling error, the government says.

The Census Bureau defines sampling error as the difference between the estimate and the result that would be obtained from a total enumeration of the population conducted under the same survey conditions. The error occurs, the Bureau says on its Web site, because only a subset of the entire population is measured in a sample survey.

Standard errors and coefficients of variation are estimated measures of sampling variation.

Upcoming Data

The Census Bureau says that it intends to revise its quarterly retail e-commerce estimates along the lines of the results reported in the 2004 Annual Retail Trade Survey. Unadjusted and adjusted estimates will be revised for 1999 through the fourth quarter of 2005, the government says. The Bureau expects to release the revised data on May 18.

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