The chart of retail e-commerce sales shows a series of waves and troughs, with a steady ascent to last quarters' $12.477 billion in online sales. That number represents an increase of 27.8 percent from the same quarter last year and a 4.6 percent increase in sales from the first quarter of 2003. Second-quarter 2003 online sales -- between April and June -- accounted for 1.5 percent of total retail sales, slightly above the 1.2 percent of total sales they represented in the second quarter of 2002.

That 27.8 percent year-over-year increase means the major e-commerce players, Amazon.com (Quote, Company Info) and eBay (Quote, Company Info), are doing a great job, according to Robert Leathern, commerce analytics group director and senior analyst for market research firm Nielsen//NetRatings.

"Online retail is growing at a pace substantially and significantly higher than all retail," Leathern told internetnews.com. "That's a pretty significant difference."

But Leathern says there's a more important story that these numbers don't tell.

"There's a significant influence component of online information to offline sales," Leathern said. "That's a much harder number to pin down."

He noted that brick-and-mortar stores like Wal-Mart (Quote, Company Info), Target (Quote, Company Info), Home Depot (Quote, Company Info)and Barnes & Noble (Quote, Company Info) are still struggling to drive online consumers to their offline stores and then back to the Web.

"If you compare the number of people who go to a Target or Wal-Mart on a monthly basis with those who go to these companies' Web sites, there's a really great difference in those percentages."

That means, according to Leathern, that there's further e-commerce growth potential for normal channel retailers. But they'll have to learn how to work this channel or suffer the consequences.

"If more and more people are buying online," Leathern said, "if these companies don't have a Web presence and aren't interacting with customers online, they're going to lose out."

Leathern said the success of Amazon.com and eBay translates to better online opportunity for small and mid-sized merchants. While the idea of a standalone store doesn't make sense any more, he said, smaller companies can take advantage of the super powers' clout and mass reach.

An Upward Trend
Looking forward, the third quarter could continue the year's upward trend. Findings from comScore indicate that online shoppers spent more than $500 million on apparel in July, as parents and students began back-to-school preparations. The firm reports online spending on apparel and accessories was up 43 percent in June and 44 percent in July versus 2002 levels, and more than 34 million Americans visited an apparel site in July — up 12 percent from June.

Susan Kuchinskas and Robyn Greenspan contributed to this report.