The year end retail numbers are being reported and US online spending during the 2007 holiday season (November and December) totaled $29.2 billion, roughly an 18.5% increase over 2006.
An 18.5% growth is a noticeable drop-off from the prior year's 25% rate and is the lowest online holiday sales growth rate since 2003. It's now clear that retail e-commerce reached an important modulation point in 2003 when increased spending by existing online buyers replaced new online buyers as the engine fueling e-commerce sales.
Industry observers are now estimating that US retail e-commerce sales (excluding travel) will reach $131 billion by the end of 2008. They are predicting that as the online channel matures over the next couple of years, the annual average growth rate will be around 18%.
A side note on one very important thing to understand, while there are no hard numbers on it, is that consumers say that positive window shopping experiences at a company online store did lead them to purchase at the company brick and mortar store. This translates into a sale that might otherwise either never have happened or gone elsewhere.
Increased spending by existing online buyers, rather than new buyers coming online, will continue to be the driving factor. This is the important trend for online retail customers to be mindful of.
As 2008 kicks off, know that the competitive bar has been raised. For online retailers to grow in 2008, you should now be enhancing your web business to do a combination of things; become more creative in both online marketing and the application of emerging web technologies, take customers away from competitors, motivate and make it easier for customers to spend more, and retain their loyalty. It’s all about your customer’s online shopping experience….think Customer Focused Shopping Environment.
