Analysis of U.S. E-Commerce Sales Using Winters’ Method

Abstract

More than three billion people around the world have the access to the Internet or around 40% of the world population has an Internet connection, and there are over one billion websites on the World Wide Web as of August 2016 (InternetLiveStas). While these numbers are truly impressive, there is no doubt that they will continue to grow rapidly in the foreseeable future. Business on the Internet has also flourished as a consequence. Electronic commerce or e-business, the process of buying, selling, transferring, or exchanging products, service, or information via computing networks, including the Internet, is positively one of the major driving forces for businesses of all sizes today. The impact of electronic commerce is indeed phenomenal or even revolutionary. The Internet and World Wide Web have changed our society substantially in general, and the ways in which companies and organizations conduct businesses, consumers buy, sell and exchange, and individuals work, communicate, entertain, get educated, and involve in many other activities in particular. The benefits and advantages of electronic commerce are being felt in many different and meaningfully ways. Nowadays a significant portion of businesses rely either heavily or in some cases solely on the revenues or returns generated from the electronic commerce division of their corresponding businesses. More and more companies and organizations of all sizes, are working to make a greater presence in the virtual world and conduct more e-commerce because of the importance of e-commerce to the success, or sustainability, or even the very survival of the organization as well as the advantages e-business brings. U.S. Census Bureau has being conducted survey on e-commerce sales since 1999 and estimated that the total electronic sales (defined as sales of goods and services where an order is placed by the buyer or price and terms of sale are negotiated over an Internet, extranet, Electronic Data Interchange (EDI) network, electronic mail, or other online system) in the U.S. This paper provides a time-series analysis of U.S. e-commerce sales for the period of 1999 - 2015 using Winters’ Method. It also includes quarterly U.S. e-commerce sales projections for the period of 2015 - 2017.

Keywords: Electronic Commerce; E-Commerce; Time Series Analysis; Winters’ method; Seasonality; Exponential smoothing