Online sales slump as older consumers grow cautious, comScore says

First the good news for online retailers: E-commerce continues to take a larger piece of the total retail pie. Now the bad news: It is growing at much slower rate in today`s economy. What`s still unclear is how long the slump will last, comScore Inc.`s Gian Fulgoni, said today at the Internet Retailer Conference & Exhibition in Boston.

"Clearly the consumer is behaving differently today," Fulgoni, chairman of the Internet usage measurement company, said in his presentation. "What is uncertain is if the changes in spending will be permanent changes."

Fulgoni said online retail spending was flat in the first quarter of 2009 compared to a year earlier at $31 billion, while total retail sales fell 5%. E-commerce grew at a 17% rate over the prior year in Q1 of 2008.

So, why are online shoppers spending less? In addition to the sour economy, Fulgoni says higher prices for gas and groceries have eaten into e-commerce revenue over the past year because they are necessities not typically sold on the web.

"E-commerce is about disposable income, and gas and groceries are eating away at disposable income," he said. And while gas prices have dropped in recent months, Fulgoni says, recent data shows them creeping up again, rising 11% from March to April.

And, comScore`s recent survey from April survey showed consumers are still worried about their financial future, four in five consumers are more afraid of their economic future than ever before.

Continue Reading at Internet Retailer.com

Gian Fulgoni's Quarterly Review of "The State of U.S. Online Retail Economy through Q1 2009 can be accessed below:

Speaker: Gian Fulgoni  Event: comScore Webinar

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comScore Chairman Gian Fulgoni presents a quarterly review of the state of the U.S. online retail economy.

Presentation highlights include:

• An overview of changes in consumers' online spending patterns and how these relate to consumers' offline behavior
• Consumer sentiment regarding the economy
• Analysis of spending patterns across key product categories
• Review of consumer spending by demographic segments
• Analysis of differences in performance across retailer segments
• Overview of the impact of search, comparison shopping and advertising on e-commerce spending in today's economy
  

ComScore, Gian Fulgoni, The State of the US Online Retail Economy