Online sales diminish market share for local business owners

Dec 29, 2012

The holiday season of 2012 will be remembered for many reasons, but one will be the record-level of online sales.

The online research firm comScore pegged holiday sales in the U.S. at $38.7 billion from November through Dec. 23, a year-over-year increase of 16 percent.

In tracking online sales from U.S. homes and comScore found there were 12 days where online sales exceeded $1 billion. On the day set aside as CyberMonday, online sales exceeded $1.36 billion. Given that North Carolina is the 10th most populous state in the U.S., a sizeable portion of the sales found their way into homes here.

While companies with a presence in the state collect a sales tax for online purchases, others do not. State residents are supposed to pay a use tax on eligible purchases. Those who fail to report their purchases fairly can be assessed the tax, plus penalties and interest.

Still, it’s likely there are plenty of purchases that escape state taxes, something that gives Internet marketers a distinct advantage over retailers who maintain a community presence.

Consumers are spending less than they did before the recession, and purchases have risen only modestly since 2008. Rising online sales means that the community stores we depend on daily have a reduced market share.

It’s one thing to browse through countless photos and descriptions of products online, but it hardly replaces the ability to touch an item, try it out or try it on. This is something that can only happen in a traditional “brick and mortar” business.

A clear advantage to patronizing the owner-operated businesses in each community is to find locally made items not likely available in chain stores or on congregate websites.

Though the appeal of online buying is growing, consumers — especially those in communities with strong local shopping opportunities — need to think beyond the moment and consider the longer-term consequences of a dwindling retail presence.