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.
 

 

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.
  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
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.

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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.

businesses,businesswomen,Internet,metaphors,persons,Photographs,surfboards,surfing the Internet,technology,women,World Wide Web,WWWHere’s the checklist:

1. Ad campaigns – make certain they’re consistent with all your promotions, and they have the right key words.

2. Landing pages – review and improve your landing pages for the desired results.

3. Shipping information – make sure it’s highly visible and easy-to-understand.

4. Return policies – should be easily read and linked to your shipping policies.

5. Contact information – should contain telephone accessibility.

6. Discount codes – need to be active and connected to the right products.

7. Affiliates – should be kept in the communication loop, and be apprised of all the necessary elements (i.e. codes, creative and links).

8. Social campaigns – have them properly orchestrated and monitored.

9. Shopping cart – do some practice runs to make sure there are no glitches.

10. 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:

“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.

 

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Why Internet Sales Grow Faster Than Retail, Food Sales

 

Though still a small percentage, Internet sales continues to garner a larger share of retail sales as a result of a robust trend that started several years ago — thanks to the wealthy.

Retail and food sales barely chugged along at $422.8 billion in June 2013 for a mere monthly increase of 0.4 percent, says the U.S. Census Bureau. But non-store retailers, such as catalogues and Internet sales, jumped 13.8 percent over June 2012.

business,businessmen,businesswomen,cooperation,gains,growths,metaphors,people,profits,teamworkFor example, three years earlier:

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 was a 9 percent increase over 2009’s total, and represented the third straight quarter of increases after the previous weak sales during the downturn.

Why?

Sales were up 17 percent among households with an income of $100,000 or higher.

Consumers were spending their money the following ways:

— 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.

It also underscored how the affluent fared better in the Great Recession and afterward during the so-called economic recovery.

comScore released this data:

Retail E-Commerce (Non-Travel) Growth Rates
Excludes Auctions, Autos and Large Corporate Purchases
Total U.S. – Home/Work/University Locations
Source: comScore, Inc.
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%

 

From the Coach’s Corner, if you’re like other businesses and want to sell more, here are related articles:

5 Strategies to Sell More from Your Web SiteTo paraphrase a line from the movie, “Field of Dreams,” it’s not always true that if you build a Web site, people will buy. These five tips work.

Why it’s Never Too Early to Plan for Q4 E-commerce — It’s never to early to get ready ASAP for Q4 online sales. Why? A study of e-commerce released in 2012 covering from November 24 to December 24, 2011, discloses some secrets you might need to know. 

How Mobile Strategies Are Most Effective with Cross-Channel Marketing — Businesses are increasingly using mobile apps to sell products, but the most successful know how best. They use cross-channel marketing tools.

11 Tips for the Best Business Mobile Web Site — If you operate a retail business, it’s increasingly important for your Web site to be easy-to-use for mobile users. The use of smartphones and tablets is skyrocketing, especially among Millennials — young adults aged 32 and under. Studies also show the majority of mobile aficionados use their devices to access the Internet.

Checklist to Create Cyber Monday Sales Success — In order to celebrate your Cyber Monday sales, you must first create a happy buying environment. That means reviewing  your store and Web site to attract prospects and to create happy customers. If you’ve prepared your merchandise and cleaned your store, you’re half done in creating happy customers.

“But economic recovery must be earned. And it will be earned by entrepreneurs and it will be earned by small businesses.”

-Jon Huntsman, Jr.

__________

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.

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Biz Coach Terry Corbell – the business-performance consultant – provides Proven Solutions for Maximum Profits.