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The Internet Can't Save Retail

In trying to explain dismal earnings reports from Macy's, Nordstrom, and other traditional retailers, it would be easy to fall back on the trope that brick-and-mortar retail is dying and only e-commerce can save it from extinction. Results due this week from mass discounters such as Walmart and Target will likely reinforce the point.

After all, a cursory glance at a stock chart comparing Amazon with other retail giants seems to tell you everything you need to know about who is winning the fight for shopper dollars.

But a deeper look at e-commerce sales trends tells a different story. It suggests online shopping isn't yet the saving grace retailers had hoped for when they began plunging billions of dollars into new websites to lure shoppers accustomed to ordering everything from books to dog food at the click of a mouse or touch of a screen.

In fact, e-commerce sales growth at companies like Walmart, Nordstrom, Gap, and JC Penney has actually been slowing, even as the companies sink more money into boosting online sales.

Nordstrom, an early adopter of online shopping, took a surprise earnings hit this past quarter due to unplanned discounts taken in response to declining shopper traffic -- in store and online. Macy's felt a similar traffic slowdown: Its number of transactions, including store and online sales, fell 3.6 percent in the...