Online spending grew 6 percent in the third quarter of 2008 versus the same period last year, a slowdown compared to the year-over-year growth rates of 12 percent in the first quarter and 13 percent in the second quarter of 2008, according to comScore Inc. Total U.S. online retail sales (excluding travel) were approximately $30 billion in the third quarter.
Internet jewelry and watch sales decreased 11 percent for the period, year-over-year, the second-largest drop among categories surveyed by the Reston, Va.-based company, which measure digital data.
The “Video Games, Consoles & Accessories” remains one of a handful of high-performing online retail categories, rising 60 percent in the third quarter, comScore reports. “Furniture, Appliances & Equipment” (up 52 percent) was another top performer, along with the “Sport & Fitness” category (up 40 percent). Categories that have not performed as well as last year include “Apparel & Accessories” (down 2 percent), “Toys & Hobbies” (down 3 percent), “Jewelry & Watches” (down 11 percent), and “Music, Movies & Videos” (down 29 percent).
In addition to reporting data from comScore’s passively-observed behavioral panel, the company surveyed more than 1,000 consumers in October 2008 to gather attitudes on the economy. The study revealed that the majority of consumers are fearful of the future, with 82 percent stating they are more afraid about the economic future than ever before. In addition, 26 percent of respondents said they believe the economy will be “better” a year from now.
“Consumers’ economic pressures continue to have a significant impact on retail spending, which is evident in the slowing growth rates in the online channel,” said Gian Fulgoni, comScore chairman (pictured). “However, in a tight economy, the Internet remains a critical sales and media channel for retailers for three reasons. First, it is a more cost-effective medium than traditional media. Second, despite the slowdown, e-commerce growth rates still exceed those at retail. And third, online marketing campaigns have been proven to not only grow a retailer’s e-commerce sales but to also have the ability to drive increased traffic into retail stores. And, with so many consumers expected to be especially cost-conscious this holiday season, it is important for retailers to reach them at the initial point of the purchase funnel – when many product research and price comparisons are being conducted online.”
So far this year, retail e-commerce growth rates have fallen from levels of 18 to 20 percent observed during the fourth quarter of 2007 to a growth rate of 6 percent in the third quarter of 2008. Since April, comScore said there have seen five consecutive months of declining growth rates. September’s 5-percent growth rate is the lowest recorded by comScore since it began tracking e-commerce sales in 2001.