E-Commerce Silver Lining Despite Holiday Sales Dip By Judy Mott
January 9, 2009
While online shopping dipped 3 percent this past holiday season, some e-tailers experienced greater growth than their offline counterparts which proves e-commerce has cemented itself as a viable channel, according to a study released this week.
New consumer data from comScore's latest survey illustrates that while consumers spent less online and offline, more people hit the Web to shop in November and December of 2008.
"E-commerce had the softest season of growth that comScore has observed since we began tracking in 2001, which clearly reflected the overall consumer retail environment," Andrew Lipsman, director of industry analysis, told InternetNews.com.
"However, the e-commerce still outperformed offline retail in several key sectors which suggests that it is a healthier retail channel that the alternative," said Lipsman, adding he believes the increased online activity indicates long-term health for the retail channel.
The news comes as businesses continue to deal with a recession environment that has consumers thinking twice about purchases in light of layoffs and potential job instability.
The comScore study compared e-commerce data to overall (online and offline) spending data from MasterCard Advisors’ SpendingPulse Unit between November 1 through December 24, 2008 and compared to the holiday season timeframe in 2007.
The newest results confirm comScore's November forecast that shoppers would head online late in the season seeking more aggressive price cuts.
And that's clearly what happened, for while consumers cut back in spend, more shopped online which boosted sales in several ecommerce segments.
Healthy Stats for Sports and Fitness
The top growing online product category, sports and fitness, saw 18 percent growth compared to the holiday season of 2007. comScore attributes the growth to a continuing consumer focus on health and fitness, as well as a higher comfort factor in ordering high-priced equipment online.
The second top category was video games and consoles, which saw a 14 percent growth year over year. New products such as the Nintendo Wii and PlayStation 3 contributed to the increase, according to the study.
The third top online category was clothing and accessories, which grew four percent from 2007. The research firm said more aggressive discounts and promotions, as well as bad weather that prohibited travel to brick-and-mortar stores, contributed to the spike.
The Dip in Online Sales
Categories not faring as well included office supplies, which saw a 30 percent dip in online activity, and music and movies, which experienced a decline of 32 percent. Lipsman said consumer are likely relying more on digital devices such as smartphones and music players rather than CD players to enjoy music.
Jewelry and computer hardware both had a 24 percent decline in sales, year to year, though consumer electronics fared better with just a five percent decline.
Home and garden online sales dropped 14 percent and event ticket sales dipped 18 percent, year to year. Online bookstores saw a one percent drop, while toys and flower stores experienced a 7 percent dip in sales.
The survey also revealed that consumers with higher incomes spent more this past holiday. There was a 7 percent increase in online spending within households of at least $100,000 in annual income, while all other income segments logged declines in spending. The biggest dip was within households earning less than $50,000 a year with a drop of 13 percent compared to a year ago.
"Security and comfort is, for the most part, an issue of the past," Lipsman said of online shopping. "However, the more experience a consumer has making e-commerce transactions, the more likely they are to increase the frequency of purchasing online and buying more expensive items online, which can contribute to growth," he said.
This article by Judy Mott appears courtesy of InternetNews.com.
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