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Offline spending vs ecommerce

Posted by Michael Bloch in ecommerce (Friday December 28, 2007 )

I remember a couple of years back a major Australian electrical goods retailer pooh-poohing the web as a channel for selling their wares. I think they are regretting that now.

The comments from the CEO and founder were really surprising – he’s no newbie to business and built up one of the most successful and well known chains in this country.

Anyhow, offline retailers who haven’t taken advantage of ecommerce likely really felt it in relation to their holiday revenue this year. These figures for 07’s holiday spending growth compared to 2006 came from MasterCard:

Ecommerce sales: + 22.4%

.. but offline sales:

Luxury: +7.1%
Footware: +6.2%
Electronics: +2.7%
Apparel: +1.4%

Quite a difference. According to MasterCard Spending Pulse, during the period between Black Friday and December 24, offline retail grew overall by a seasonally adjusted 3.6% compared to the same period in 2006.

Ecommerce had a big start to the shopping season, with growth around 30% on Black Friday. Then on November 26, ecommerce spending grew by 40% over the previous year. There were then a series of record breaking days, with December 13 generating the biggest single daily sales volume online.

Mastercard believes gas being between 30% and 35% more expensive than the same period in 2006 bit into holiday spending. With severe weather also affecting many regions of the USA, people flocked to ecommerce.

Given the continued instability of oil supply, crazy weather, subprime fallout and various other factors, if your company still isn’t selling online; one of your top business resolutions for 2008 should be to go beyond a basic web prescence and get ecommerce enabled.


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