Internet Retailing — Opportunities and Challenges for the UK’s Distribution Property Markets
Internet Retailing — Opportunities and Challenges for the UK’s Distribution Property Markets
Read MoreTag: E-Commerce
EWWS Company Profile – enambling global etail commerce landed cost
EWWS Company Profile – enambling global etail commerce landed cost
Read MoreExciting developments in e-commerce
Colum Joyce, Director of Strategy, IMRG, writes for World Mail Review 2008.
Read MoreOnline Retail Growth Is Slowing
Economic woes online, too?
Although consumers are reacting to the economic downturn by spending less, this will create more of a hardship for retail stores than for online retail outlets.
“Store sales will be hit harder than Internet sales because affluent shoppers, who form the core of online buyers, tend to ride out economic downturns better than lower- and middle-income consumers,” says Jeff Grau, eMarketer senior analyst and author of the new report, US Retail E-Commerce: Slower But Still Steady Growth.
eMarketer estimates that US retail e-commerce sales (excluding travel) will reach USD 146 billion in 2008, up 14.3% over 2007.
“Still,” warns Mr. Grau, “over the next few years online sales growth rates will steadily decline.”
There is little reason for panic, however.
“A drop in the number of new online buyers is an inevitable sign of the maturation of the online retail channel,” says Mr. Grau.
Read MoreRetail E-Commerce and the Economy
The US Department of Commerce released retail e-commerce sales data last Thursday. Online sales grew by only 13.4% during Q1 2008 over Q1 2007.
That is quite a drop-off from recent e-commerce growth rates. For instance, in 2007 total e-commerce sales grew by 19.8% over 2006.
“This shows that the economic slowdown is having more of an effect than people suspected,” said Jeffrey Grau, senior analyst at eMarketer. “It’s accelerating existing trends.”
Mr. Grau said that retail e-commerce sales growth would have slowed even without any concern about the economy. Since 2003, the real engine of e-commerce growth has come from increased sales to existing online buyers rather than new buyers.
E-commerce sales growth is still higher than overall retail sales growth, which has been 6% at most over the past five to six years. In contrast, retail e-commerce sales growth has been about 25% or more during the same time.
One reason for slowed overall retail sales growth is that existing online buyers are doing more of their buying on the Internet instead of in stores, according to USC Annenberg School Center for the Digital Future data. The organization reported that not only did large percentages of consumers say their online buying led to decreased offline buying, but that the number is growing.
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