Online Spending Back to Economic Reality?
Dec. 5, 2010
Consumers have slowed their holiday online spending after setting a record of $16.8 billion for the first month of the all-important selling season for retailers. That’s according to research firm comScore.
comScore says the 2010 12 percent growth-rate over 2009 slowed to 9 percent after Cyber Monday’s record $1.028 billion in purchases. The spending for the next three days – $911 million, $868 million and $850, respectively – showed a clear subsiding in spending by consumers.
“We believe this softening is attributable to retailers’ heavy discounting and promotional activity during the earlier part of the holiday season [through Cyber Monday], which pulled some consumer demand forward, resulting in a mild hangover effect in the days immediately following Cyber Monday,” said comScore chairman Gian Fulgoni.”
| 2010 Holiday Season To Date vs. Corresponding Days* in 2009 Non-Travel (Retail) Spending Excludes Auctions and Large Corporate Purchases Total U.S. – Home/Work/University Locations Source: comScore, Inc. |
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Millions ($) | ||
| 2009 | 2010 | Percent Change | |
| November 1 – December 3 | $15,041 | $16,803 | 12% |
| Thanksgiving Day (Nov. 25) | $318 | $407 | 28% |
| Black Friday (Nov. 26) | $595 | $648 | 9% |
| Cyber Monday (Nov. 29) | $887 | $1,028 | 16% |
| Week Ending Dec. 3 (Nov. 27 – Dec. 3) | $4,724 | $5,163 | 9% |
*Corresponding days based on corresponding shopping days (November 2 thru December 4, 2009)
“We may see another week of this effect before late season discounts and buying by procrastinators gives the season a final spending surge,” he added.
Unfortunately, for small retailers, comScore reports most of the spending benefits the 25 largest retailers. Their revenue jumped 20 percent compared to much slower growth for small retailers. The big 25 gained 4.2 percent market share to 67.8 percent. That’s probably because they have more financial resources for promotion.
| Analysis of Spending Growth Among Top 25 Online Retail Sites Nov. 1-29, 2010 vs. Corresponding Days in 2009 Total U.S. – Home/Work/University Locations Source: comScore, Inc. |
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| Spending Growth | Dollar Share | ||
| 2009 | 2010 | ||
| Total Retail | 13% | 100.0% | 100.0% |
| Top 25 Retailers | 20% | 63.6% | 67.8% |
| Small and Mid-Tail Retailers | 0% | 36.4% | 32.2% |
Social media continues to influence many shoppers, but not all, according to comScore’s survey of 500 respondents. Thirty-three percent said recommendations from friends are important to them, but 24 percent disagreed while 43 percent didn’t comment.
| Q: “How much do you agree with the following statement? Recommendations from friends on social media sites are a great way to get gift ideas during the holiday season.” November 24-29, 2010, n=503 Total U.S. – Home/Work/University Locations Source: comScore 2010 Holiday Survey |
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| Response | Percent of Respondents |
| Strongly Agree | 7% |
| Agree | 26% |
| Neither Agree nor Disagree | 43% |
| Disagree | 9% |
| Strongly Disagree | 15% |
Consumer-product reviews followed by expert-product reviews, respectively, were influential.
But with dire unemployment news and decreased government revenue, my sense is that a tepid economy is still a factor. A combination of spending by affluent shoppers and heavy discounting are responsible for the initial online-spending growth rate. The economy is still difficult for the majority of consumers.
This also means governments at all levels need to borrow strategic planning strategies from successful businesses. It’s past time for them to adopt public policies with balanced budgets for the benefit of their constituents.
From the Coach’s Corner, for some quick tips to boost your Web-site sales, see 10 Tips to Optimize Your Web Site for Higher Sales.
10 Tips to Optimize Your Web Site for Higher Sales
If you haven’t optimized your Web site for sales, you might want to reconsider. There are more and more indications that online shopping will continue to grow.
In an article entitled, “Cyber Monday Prep: 10 Tips for Greater Sales,” Website Magazine offered some excellent strategies in 2010. They’re still relevant. They were intended to help you for Cyber Monday, but my sense is they’re great tips to keep in mind year-round.
Here’s the checklist:
- Ad campaigns – make certain they’re consistent with all your promotions, and they have the right key words.
- Landing pages – review and improve your landing pages for the desired results.
- Shipping information – make sure it’s highly visible and easy-to-understand.
- Return policies – should be easily read and linked to your shipping policies.
- Contact information – should contain telephone accessibility.
- Discount codes – need to be active and connected to the right products.
- Affiliates – should be kept in the communication loop, and be apprised of all the necessary elements (i.e. codes, creative and links).
- Social campaigns – have them properly orchestrated and monitored.
- Shopping cart – do some practice runs to make sure there are no glitches.
- E-mail – responses should be prompt, show appreciation, cross-selling options, and opportunities for consumers to receive your newsletters.
Finally, make certain your site is ready for a sudden increase in traffic. And ask your friends and relatives to try out your site.
From the Coach’s Corner, here are related articles:
- Tips, Plus Why it’s Never Too Early to Plan for Q4 E-commerce
- Web Site ‘Priming’ – 6 Tips That Will Help You Succeed
- Want to Start an E-mail Marketing Campaign? 6 Tips for Small Business
- Best Practices to Optimize Your Brand, Manage Your Web Reputation
- The Key to Internet Dominance: Think Integration
“Your brand is created out of customer contact and the experience your customers have of you.”
-Stelios Haji-Ioannou
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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.
Internet Marketing Trend: Q2 Sales Increase 9 Percent
Aug. 10, 2010
Internet retail sales increased to an aggregate $32.9 billion in the U.S. during the second quarter of 2010, according to research firm comScore. That’s a 9 percent increase over 2009’s total, and represents the third straight quarter of increases after the previous weak sales during the downturn.
“The second quarter’s continuation of the first quarter’s strong retail e-commerce growth rates is encouraging,” says Gian Fulgoni, the comScore chair. “We remain cautiously optimistic heading into the second half of the year, but we will be keeping a close eye on unemployment rates, which along with potential uncertainty in the stock market could limit growth in e-commerce spending in the near term.”
Sales are up 17 percent among households with an income of $100,000 or higher.
Consumers spending their money in consumer electronics (excluding PC peripherals); computer software (excluding PC games); computers/peripherals/PDAs; and books and magazines.
It’s also worth noting that retailers with multi-channels gained the most market share vis-à-vis companies with merely an online presence.
| Retail E-Commerce (Non-Travel) Growth Rates Excludes Auctions, Autos and Large Corporate Purchases Total U.S. – Home/Work/University Locations Source: comScore, Inc. |
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| Quarter | E-Commerce Spending ($ Millions) | Y/Y Percent Change |
| Q1 2007 | $27,970 | 17% |
| Q2 2007 | $27,176 | 23% |
| Q3 2007 | $28,441 | 23% |
| Q4 2007 | $39,132 | 19% |
| Q1 2008 | $31,178 | 11% |
| Q2 2008 | $30,581 | 13% |
| Q3 2008 | $30,274 | 6% |
| Q4 2008 | $38,071 | -3% |
| Q1 2009 | $31,031 | 0% |
| Q2 2009 | $30,169 | -1% |
| Q3 2009 | $29,552 | -2% |
| Q4 2009 | $39,045 | 3% |
| Q1 2010 | $33,984 | 10% |
| Q2 2010 | $32,942 | 9% |
That’s certainly encouraging news. But it also underscores how the affluent are faring better in the recovery, so far.
From the Coach’s Corner, if you’re like other businesses and want to sell more, here are 5 Strategies to Sell More from Your Web Site.