Online Sales Expected to Slow during the Holidays
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%.
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.
Has anyone seen examples of novel e-commerce strategies this season?