Retailers increase revenue thanks to online credit card processing

November 21, 2013

Online sales are helping many retailers to offset a decrease in their in-store sales this year.

Online sales are helping many retailers to offset a decrease in their in-store sales this year.

A recent report from the Wall Street Journal detailed how Wal-Mart executives were worried that consumers were spending less at their store locations for numerous reasons, such as the rollback of U.S. food-stamp benefits and general economic uncertainty.

However, the company has not seen the same decrease in consumer spending when it comes to its online credit card processing terminals. Wal-Mart announced that its global e-commerce sales grew by 40 percent during its earnings report for the third quarter of 2013, according to a report from Internet Retailer. Comparable-store sales for Wal-Mart locations in the U.S. dropped by 0.3 percent during the same time period. 

Other retailers see similar sales increases from their e-commerce channels
Wal-Mart isn’t the only retail outlet offsetting a decrease in its in-store sales with an increase in its online revenue. Dick’s Sporting Goods recently announced that e-commerce sales represented 6.5 percent of all its transactions during the third quarter of 2013, according to a recent report from Internet Retailer. Online credit card processing services had only accounted for 4.4 percent of sales during the third quarter of 2012, so the company has seen an extremely hearty increase in the amount of consumers shopping online in only 12 months. 

CEO Edward Stack told investors that promotions such as free shipping were helping to increase overall profits, even if they did add onto the costs of operating the e-commerce channel, according to Internet Retailer. By investing in its e-commerce outlet, the company was able to increase its online sales by more than 50 percent, when compared to transaction figures recorded during 2012.

“When we do offer free shipping the sales spike quite a bit,” Stack told investors, according to the news outlet. “We’re trying to figure out what the optimal point will be. There will be more free shipping, rather than less free shipping.”

Best Buy’s online sales also spiked significantly during the third quarter of 2013 – increasing by more than 15 percent year-over-year, according to another Internet Retailer report. The company’s total revenue decreased by 0.2 percent during the same quarter, showing how online sales rates as moving upwards even as in-store revenue travels in the opposite direction. 

Internet Retailer reports that the increase in the company’s online sales was attributed to higher site traffic, a greater number of online orders being placed from its retail locations, and higher inventory availability.

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