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Recession rumors & online sales

Posted by Michael Bloch in ecommerce (Sunday January 20, 2008 )

The “r” word – recession – has been doing the rounds for a couple of weeks now. It appears it could be spooking some consumers and possibly impacting on ecommerce.

January has experienced somewhat of a double whammy – firstly, there’s the post-Christmas slump where in many sectors, consumers are recovering from Xmas. Then the word recession started appearing more often in financial circles accompanied by one of the most gloomy starts to the year in the USA on record in relation to market activity.

Yahoo Buzz Log reports:

“Demand for “definition of a recession economy” surged nearly 500%. Questions asking “what is a recession” picked up 260%, while “what is a recession economy” and “are we in a recession” nearly vaulted off the list.”

In a few of the forums I haunt, I’ve seen some merchants getting very concerned about the R word and reporting lackluster sales. The sites I monitor show a mixed bag in terms of revenue – some up, some down on same period last year (taking into account various factors); but no major moves either way and nothing to clearly show the sky is falling.

It’s not unusual that when negative financial rumours do the rounds for people to start freaking out and it takes them a little while to adjust. Whether the USA is in recession or not I’m certainly not qualified to say, but it’s always good to bear in mind that when the US gets a cold, the rest of the world starts sneezing. On the other hand, it’s an ill wind that blows nobody any good; so if you are experiencing a bit of a downturn; see it as a time to hone what you have and seek out new opportunities. Perhaps a “recession buster” sale – put a positive spin on the situation.

Have a think about products and services that save money, or stuff that people need regardless of the economic times. On a side note, it’s interesting and somewhat tragic that in a poor economy, people gamble more – but before you start furiously working on a casino site, aside from the ethical issues; a) check the legality of operating or even promoting such services in your state and b) understand that it is incredibly competitive – your chances of success are slim.

What about you? Are you noticing any unusual trends one way in your online business?


Rainy day revenue


1 comment for Recession rumors & online sales
  1. Yes Michael, I can report a little change, but no slow down.
    My daughters site has had a steady increase in sales, and a slight increase in adwords costs.
    Apart from one huge overnight buying splurge by her subscribers, which we are still trying to account for and learn from.
    She did not do enough work for a while on creating enough testing. I am beginning to understand your advice on testing, it is MAJOR!

    I also agree with your assessment of the recessions possible effect on Australia.
    A sniffle of recession in America has historically meant that Australia will get the financial flu real good!

    Consequently I am a bit jittery about the timing of the next stage of my dauter’s business developement.

    Her new joomla web page is about to go online, she will be opening her new blog, and looking at spreading the marketing. The possibility of our economy hitting hard times is a worry.

    To be safe, I guess I will encourage lots of split testing first, there are still some graphics that need squashing. (thank you for the tip and ready made picture, you are most kind.}

    Comment by Ern — January 20, 2008 @ 7:40 pm

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