E-commerce Spending Falls First Time

February 15, 2010

This article is included in these additional categories:

Analytics, Automated & MarTech | Retail & E-Commerce | Technology

U.S. e-commerce spending fell for the first time on record in 2009, according to the comScore 2009 U.S. Digital Year in Review.

Total U.S. e-commerce spending reached $209.6 billion in 2009, down 2% compared to the previous year and the first year on record with negative growth rates. Travel e-commerce spending dropped 5% to $79.8 billion, while retail (non-travel) e-commerce spending remained virtually flat at $129.8 billion.

For most of the past decade, retail e-commerce spending grew at an annual rate of roughly 20%. That growth rate fell to 6% in 2008, the first year of the decade with single-digit e-commerce growth.

Holidays Show Hope

Although for the first 10 months of 2009, e-commerce spending showed at best minimal improvement in year-over-growth, and fell almost 6% in July, the holiday spending months of November and December showed marked improvement from 2008. In November 2009, US consumers spent about $12 billion online, roughly 3% more than in November 2008. In December 2009, US e-commerce spending equaled about $17 billion, representing roughly 5% year-over-year growth.

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While some of this growth is attributable to more favorable year-over-year comparisons versus the disastrous 2008 holiday season, it does suggest that the tides of consumer sentiment are beginning to turn and that 2010 may be a healthier year for retail e-commerce.

A look at the top 10 online retail spending days in 2009 confirms the strong e-commerce performance of the 2009 holiday season. All 10 days were in November or December. The heaviest individual spending day of the year was Tuesday, December 15 with $913 million in spending, the first day on record to eclipse the $900 million spending threshold. Cyber Monday (Nov. 30, 2009) was the second-heaviest spending day with $887 million, followed by December 1 with $886 million and December 16 with $874 million.

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Books & Magazines Lead Category Growth

In this recessionary year, only a handful of retail e-commerce categories experienced growth. Books & magazines topped the list of gaining categories with 12% growth, bolstered by category-wide price-cutting and the release of numerous high-profile best-sellers. Computer software (up 7%) ranked second, followed by sport & fitness (up 6%) and jewelry & watches (up 4%), which rebounded from an especially weak 2008. Other positive growth categories included video games, consoles & accessories (up 3%), consumer electronics (up 3%) and computers, peripherals & PDAs (up 1%).

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Online Product Recommendations Miss Mark

One possible contributor to the annual decline in e-commerce spending during 2009 is the poor performance of online product recommendations, according to a recent study from ChoiceStream. Study results reveal that 59% of shoppers said they received poor quality product recommendations from retailer websites in 2009. This is a substantial 31% increase from the 45% of shoppers who reported poor quality product recommendations in 2008.

When asked why their recommendations were poor quality, 54% of shoppers said the recommendations did not relate to their search. Another 49% said the recommendations did not match their preferences, 46% said the recommendations were inappropriate, and 45% said they already owned recommended products.

About the Survey: E-commerce spending results are taken from the comScore 2009 US Digital Year in Review.

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