ComScore released its monthly retail e-commerce sales estimates, and the news is about as bad as you’d expect.
Online spending grew by just 1 percent in October compared to the same month a year ago, the lowest monthly growth rate since ComScore started tracking such numbers in 2001. The worst performance came from lower-income families; households making less than $50,000 a year exhibited negative growth over last year.
Rising prices were cited as one factor working against spending, but “it’s clear that the increase in the country’s unemployment rate along with the shock of the financial market meltdown have had a negative impact on the psyche of the American consumer, and the effects were clearly felt in the online retail sector,” said ComScore’s chairman, Gian Fulgoni, in a written statement. “October represented the softest single month of online retail growth on record, and we can only hope that the recent sharp drop in oil prices will cause a continued easing of inflation and a strengthening in consumer spending as we enter the critical holiday shopping season.”
The news comes barely a week before black Friday, the day after Thanksgiving, when retailers traditionally turn their first profits of the year, and “Cyber Monday,” which in recent years has become a banner day for e-retailers as shoppers return to work and use their offices’ broadband connections to do holiday shopping online.
Expect the outlook for both days to be scaled back not just because of today’s estimates, but because of long-term trends. Retail e-commerce rates have fallen since August 2007, when they grew at a rate of 28 percent. October’s numbers represent the sixth straight month of declines.
A look at three month trends reveals some good news: Households making more than $100,000 a year actually increased their spending by 14 percent over that period. Spending from households making $50,000 a year or less declined by 3 percent, and those between $50,000 and $100,000 were basically flat, with spending growth of just 1 percent.
“It’s clear that worry, concern and even fear are the prevailing consumer sentiments at the moment, and this is causing all income segments to pull back their spending,” added Fulgoni. “It would appear the only near term ray of hope for this year’s holiday shopping season is that the sharp drop in oil prices will cause an easing in inflation and provide a much-needed boost in consumers’ spending power.”
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