E-commerce still robust despite economic situation

Although 2008 was hard on most facets of the economy, comScore, a global Internet marketing data and services information provider, affirmed that e-commerce was up 2% this January compared to last year. comScore also recently released that internet searches are up 38% from last year and such a jump is due to the number of people online searching not only more days during the month, but also more times each day. Conversely, the U.S. Commerce Department reported that retail sales decreased over 5% in the same month.

Consumers rely heavily on search and e-commerce because it is a valid and capable medium for business and purchases. Relatively, e-commerce is surpassing retail with potential that is still unlimited. Consider this, online sales were down 3% for Q4 2008 from Q4 2007, but were up 6% for the entire year, even with the extensive increases of the last decade. Total retail sales, in counterpoint, decreased 8.6% for Q4 2008 from Q4 2007, and was down 0.6% for the year.

Online growth will persist and progress, but all businesses should stay informed of consumer trends and adapt strategies accordingly. comScore has advised that consumers with income greater than $100,000/year are showing decreased growth in online spending (up 17% for Q4 2008 from Q4 2007, but up 8% for Janauary 2008 from previous January) with 78% of consumer panel in the same income bracket acknowledging an intent to reduce spending. Middle-income bracket online spending showed a growth in January of 2% following a decrease of 10% in Q4 2008 from Q4 2007.

Not surprisingly for these times, consumers of all stripes have become more frugal and thrifty. Online coupon sales and searches are up 157% from 2007, traffic to such sites is up 46%, and 4 million more shoppers used comparison sites during the 2008 holiday season than in 2007. Coupons may seem like the oldest marketing gimmick in the book, but 157% is not a number to ignore.

Another compelling tidbit from comScore is that of all online sales in Q4 2008, close to half were at sites run by multi-channel merchants. Those businesses with retail and/or catalog operations ought to consider the current opportunity to grow business by focusing on e-commerce and onlines sales as a supplement and a stopgap to our current economic situation.

Furthermore, online sale of services and knowledge should be considered if you are not in the business of material items. There is a great deal being written about innovation as the answer to the recession, and economists generally agree that economic shifts are due to changes in consumer confidence and presumptions. Make your website and your business one that instills confidence and fulfills expectations. Remember, we are all in this together.