Wednesday, November 20, 2013

A Tale of Two Trends: Nonstore Retailers

Every November and December we hear about the increasing number of Americans buying their holiday gifts online using their smart phone, laptop, or tablet. Evidently there is something more attractive about purchasing that video game console online from the comfort of your couch or on your lunch break than waiting in line for hours the day after Thanksgiving. The new trendy day to shop is “Cyber Monday,” instead of the dreaded “Black Friday.”

Electronic shopping like this is one of the key components of the nonstore retail trade industry.

What is Nonstore Retail Trade?

When discussing retail trade many picture a fixed store location that a consumer visits to purchase goods, such as an auto dealership, grocery store, shopping mall, or big-box store. Although the vast majority of retail activity still occurs in these physical store locations, a major subsector of retail trade is nonstore retail.

Within nonstore retail, there are four main industries including: mail order houses; electronic shopping; vending machine operators; and direct selling. 

Nonstore Retailers in Oregon

Nonstore retail’s share of total retail employment in Oregon is on the decline. This decline is due to employment losses in mail order houses, vending machine operators, and direct selling. However, electronic shopping experienced an average annual growth rate of 14 percent from 2007 to 2013. The growth occurring in electronic shopping is masked by the losses in other components of nonstore retail. For instance, the combined average annual employment in mail order houses, vending machine operators, and direct selling shrank by 351 jobs from 2011 to 2012. During that same period annual average employment in electronic shopping increased by 300 jobs.

Nonstore Retail’s Share of Retail Sales on the Rise

For the past two decades, nationwide nonstore retailers accounted for about 3 percent of total retail trade employment. During that same time period the industry experienced a dramatic increase in its share of total retail sales. In January 1993, nonstore retail accounted for about 5 percent of all retail sales. By January 2013 nonstore retail accounted for nearly 10 percent of nationwide retail sales.

This surge in sales share is due to the increasing popularity of electronic shopping. Since the early 1990s the internet revolutionized the way people purchase goods and services

For more information about nonstore retail in Oregon, check out Damon Runberg's full article "A Tale of Two Trends: Nonstore Retailers"

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