Online Sales Slip in '09

Online Sales Slip

MAY 5, 2009

Whoops!

Only a few days ago, eMarketer ran an article (Online Sales Up) based on a study that showed US online retail sales on average were up 11% in Q1 2009.

Looking forward, however, the projection for online sales in 2009 does not appear so rosy.

After years of unbroken growth, eMarketer forecasts thatcontinued recessionary pressure will cause online sales to actuallycontract in 2009—by 0.4%.

“eMarketer forecasts that online sales will be virtually flat in2009,” says Jeffrey Grau, eMarketer senior analyst and author of thenew report, E-Commerce in a Recession: The Impact on Consumers and Retailers.“Assuming the economy will begin to recover in 2010, however, retailerswill see a return to sales growth and hit full stride again in 2011.”

eMarketer projects that from 2011 to 2013 online sales will rebound to double-digit growth.NIn the meantime, even in the trough of the economy, there are opportunities for online retailers.

“The current economic upheaval has weakened many traditionalretailers, putting consumers’ wallets up for grabs,” says Mr. Grau.“Online retailers that can fill the void with superior customerservice, rich product information and greater shopping convenienceshave a chance to win new customers for life.” In addition, even as consumers are reining in spending, they are increasingly researching purchases online.

“There is nothing new about consumers using the Internet to helpthem make purchase decisions on big-ticket items such as cars andcomputers,” says Mr. Grau. “But a new breed of consumers is extendingtheir research to everyday products.”

These information-hungry shoppers go online to find out whethera toy is safe, a shampoo is unscented or a diaper manufacturer isenvironmentally responsible. In other words, the way consumers shop is changing, and smartonline retailers will take advantage their new behavior—and informationneeds.

“The new online consumer is independent and less likely totrust recommendations of a salesperson or be swayed by the emotionalappeal of a TV ad,” says Mr. Grau.

Editor's Note: I wonder if you can parlay that to mean that they will be less likely to trust recommendations of people who say "type your card information into our box" or "click your PIN into the floating PIN Pad" or HTTPS-ecure.

Posted by John B. Frank Tuesday, May 5, 2009