Online Sales Expected to Slow during the Holidays

Last Updated Nov 26, 2008 11:20 AM EST

This holiday season, online sales may be worse than last season's tally. For e-retailers that expected online sales to keep beating the previous year's total, the economic slowdown has been shocking, according to a story in today's BusinessWeek.
First the Bad
According to BusinessWeek, the outlook is grim:
  • The online selling season this Christmas looks to be the historic worst "by a mile," says ComScore chairman Gian Fulgoni. "No one was expecting the magnitude of the slowdown."
  • ComScore (SCOR) on Nov. 25 forecast no growth in U.S. online retail sales in November and December, vs. last year's 19% increase.
  • E-commerce sales, excluding travel, dropped 4% from Nov. 1 to 23, to $8.2 billion, ComScore reported, the first drop since the medium's inception. October e-commerce sales increased just 1% in the U.S., according to ComScore; last October they were up 19%.
The Silver Lining
If any good can come of this, economic realities have forced e-retailers to brush up on their strategies. Here are a few adjustments that have been undertaken, according to BusinessWeek:
  • HP's (HPQ) research found "That the long lists of recommended add-on products commonly featured on e-commerce sites yield diminishing returns." Quality suggestions have replaced quantity in its e-commerce efforts.
  • Starting in May, Gap (GPS) created a common checkout area for all four of its online stores--The Gap, Banana Republic, Old Navy, and Piperlime. That, combined with aggressive e-mail marketing, helped Gap increase online sales 15% in the third quarter, according to Thomas Harpointner, CEO of e-mail marketing company AIS Media.
Curiously, sales of items typically sold online like tech gadgets and clothes have slowed, while big ticket items like furniture have grown slightly. The article concludes that most e-retailers have done nothing to adjust their strategies this season. Most will likely fall back on deep price cuts.

Has anyone seen examples of novel e-commerce strategies this season?