Online retailers are not immune to the current credit crunch and are feeling the heat in a big way. The New York Times says that online spending dropped 4 percent for the first 23 days of November 2008, compared with the same period last year. According to comScore, online spending was about $8.19 billion vs. $8.51 billion in 2007. They are forecasting a flat holiday season at $29.2 billion.
Their estimates are more conservative than the $30.3 billion in online spending this holiday season projected by eMarketer, which estimated a total of $136.8 billion in holiday spending. In comparison, comScore is projecting $131.3 billion in total. Despite this lower number, I think comScore is being too optimistic.If you take the estimates at face value, they mean that we will see additional spending of $21.01 billion during the remainder of 2008 holiday season. In 2007, for the same remainder of the season, consumers spent $20.69 billion, a gain of 1.54 percent. If you believe comScore’s survey, which says that 46 percent of people are buying less expensive gifts, and 47 percent are buying fewer gifts — it is hard to see how they are going to get to the $21.01 billion number.
Hitwise, another research firm, today reported that “for the retail category overall traffic is flat when the market share of visits for last week is compared to the week before Thanksgiving in 2007.” They are seeing an increase in traffic interest to web sites preceding Black Friday, the day after Thanksgiving, and at the same time “daily market share of visits to the Retail 500 (adjusted to reflect the number of days leading up to Thanksgiving) has also remained relatively flat.”
The upside of this bad news is that if you are actually looking to buy anything, it is a pretty good season for bargain hunting. The longer you wait, the more you may be able to save. For the past few days I have been getting all sorts of offers from online retailers…I smell the desperation. Now, wait for prices to fall low enough.