US Retail E-Commerce Sales Growth Slows to 6% in Q3

November 4, 2008

This article is included in these additional categories:

Retail & E-Commerce

Online spending grew 6% in Q3 ’08 versus Q3 ’07 – a slowdown compared with the year-over-year growth rates of 12% in Q1 and 13% in Q2 of 2008, according to comScore’s Q3 2008 retail e-commerce report.

Total US online retail sales (excluding travel) were approximately $30 billion in Q3, comScore said.

Monthly Growth Slowing

Retail e-commerce growth rates have fallen from levels of 18-20% during 4Q ’07 to a growth rate of only 6% in 3Q ’08, comScore found. Since April, growth rates have slowed – and have been lower each month than the previous month.

September’s 5% year-over-year growth rate is the lowest recorded by comScore since it began tracking e-commerce sales (non-travel, excluding auctions, autos and large corporate purchases) in 2001:

comscore-retail-ecommerce-q3-percentages-month-september-2008.jpg

Growth by Category

comscore-ecommerce-growth-by-category-3q08-vs-3q07.jpg

  • As in the prior quarter, Video Games, Consoles & Accessories remains one of a handful of high-performing online retail categories, rising 60% in Q3 versus the year-earlier quarter.
  • Furniture, Appliances & Equipment (up 52%) was another top performer, along with the Sport & Fitness category (up 40%).
  • Categories that have not performed as well as last year include Apparel & Accessories (down 2%), Toys & Hobbies (down 3%), Jewelry & Watches (down 11%), and Music, Movies & Videos (down 29%).

Consumer survey

Most consumers are fearful of the future, with 82% saying they are more afraid about the economic future than ever before, according to comScore’s ” State of the US Online Retail Economy Survey” of more than 1,000 consumers in October 2008.

Asked to choose among four possible responses about the state of the economy a year from now:

  • 27% of respondents agreed that the economy would be “worse.”
  • 26% agreed that the economy would be “better.”
  • 24% agreed that it would be “the same.”
  • 24% chose “I don’t know.”

“Consumers’ economic pressures continue to have a significant impact on retail spending, which is evident in the slowing growth rates in the online channel,” commented comScore Chairman Gian Fulgoni.

When the economy is tight, however, the internet remains “a critical sales and media channel for retailers,” he said, giving three reasons:

  • First, it is a more cost-effective medium than traditional media.
  • Second, despite the slowdown, e-commerce growth rates still exceed those at retail.
  • Third, online marketing campaigns have been proven not only to grow a retailer’s e-commerce sales but also to have the ability to drive increased traffic into retail stores.

“And, with so many consumers expected to be especially cost-conscious this holiday season, it is important for retailers to reach them at the initial point of the purchase funnel – when many product research and price comparisons are being conducted online,” Fulgoni concluded.


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