Discounts Not Enough to Revive Online Retail Sales - WSJ.com
The Wall Street Journal reports on a dismal holiday season for retailers.  Based on the fact that the holiday season constitutes upwards of 30% of annual sales for some bricks and mortar retailers, this is indeed bad news.  Combined with the credit crisis, this could be the a death blow for some.  But it doesn't surprise me in the very least.  The paradigm shifting in consumer shopping behavior would have dealt a nasty blow to some bricks and mortar retailers in a mediocre economy.  In this one, you can start writing the obits...

Here's a snippet from WSJ...

Online sales held up better than the rest of the retail market during the dismal holiday period, but the season is still likely to go down as one of the worst on record for the traditionally booming e-commerce sector.

While online spending was down just 2% from Nov. 1 through Christmas Eve compared with a drop of 5.5% to 8% for retail as a whole, e-commerce strength wasn't widespread. Instead, it was clustered around several big-name Web sites such as Amazon.com Inc., Apple Inc. and Wal-Mart Stores Inc. Online sales were also fueled by discounts that aren't likely to continue.

Overall, in a sector where sales have historically increased 20% annually, this is the first holiday season where online sales haven'tgrown. E-commerce sales were "not amazing by any stretch," says JohnAiken, managing director and head of equity research for Majestic Research.

Many traditionally strong ecommerce sites also ended up losing
  visitors in what is typically their busiest period. Internet auction site eBay Inc.'s traffic dropped 16% between early November and mid-December, while Best Buy Co.'s site experienced a 17% decline in visitor traffic, according to comScore Inc., which tracks Internet activity. The number of visitors to e-commerce Web sites during the period grew less than 1%, compared  with growth of about 5% typically.

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Posted by John B. Frank Monday, December 29, 2008

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