Online retail activity fell four percent in November compared from the same month last year, the first time e-commerce spending has experienced decline, according to the latest result conducted by comScore which is an online research group.
The research group also predicted that e-commerce spending in holiday season will be lower compared to last year due to global economic slowdown. In 2007, growth rate has dramatically increased to almost 20 percent, but with consumers’ low confidence, higher inflation, higher prices, and unstable economic condition experienced nowadays, online market should expect that consumers are tightening their belt.
In a newspaper report, majority of online companies have experienced dramatic decline of revenue, stating this occurrence is unusual in this holiday season since past trends have shown that consumers are more likely to spend money during this period.
One Virginia-based company said that last years’ $8.5 billion revenue has declined to four percent resulting to $3 million less revenue.
comScore chairman Gian Fulgoni said that with many factors affecting the purchasing power of consumers including weak job market and unsteady stock market sector, online stores will experience unchanged or flat growth during this holiday season where people are usually spending more money compared to any period of the year.
Fulgoni added that last years’ $29.2 billion revenue during the holiday season will be almost the same during this period.
But online market should not be as worried despite with the latest event since this decline has been only experienced in November and will continue in December. According to comScore’s past results conducted from January to October this year, e-commerce spending has increased to almost 10 percent over the same period in 2007, resulting to $102.1 billion in total revenue.
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