With credit tightening and consumer confidence shaky, you know this is going to be a tough year for holiday sales. A forecast that came out this morning from Lehman Brothers (now Barclays Capital), puts Internet sales over the upcoming holiday season growing at just 8 percent, compared to 19 percent growth last year (and 26 percent in 2006). That’s still better than the one percent growth in holiday ales expected at physical department stores, but the fourth quarter is make-or-break for many e-commerce sites and the slowdown in growth is not going to help.
A slowdown in demand will also hurt sites that depend on advertising, including Google (search in the fourth quarter is “largely driven by retail,” says the Barclays report. It is no wonder that other analysts are also beginning to cut back their expectations for Internet advertising revenues overall.
Despite the trimmed forecasts, the Internet remains the most likely sector to see the strongest growth in both retail sales and advertising. Just don’t get your hopes up too high.
I don’t think so eBay.
Sounds like a perfect time for sites like http://www.swaptree.com and esty.com
Can’t wait to see what kind of great deals we will find this year!
we are bullish on hoodies this holiday season. launching a eCom startup during this financial meltdown has been a bit unnerving and seeing grinchish predictions like these certainly does not help.
Look for a big pick up after the elections. Change / Hope will do a lot to boost spirits and spending this year.
…curl up, in your bed - in the fetal position, underneath the sheets, eyes closed…and keep repeating to yourself:
This is just a dream, this is not happening…this is just a dream, this is not happening
Come on, is this even really news? The economy sucks, jobs are being lost, unemployment is high and the whole banking industry needs a government bailout to keep doing business. I’m glad holiday spending is down. Maybe people are learning to not spend money they don’t have!
It’s still growth! Jesus, I hate analysts.
The analysts are split on this.
Forrester for example thinks that online shopping will grow this year, especially given the impact of gas prices, and the ability to find a deal online. Forrester thinks that stores that are not selling essentials will have a slow season.
I tend to agree with that position, but i do think that people a) will spend less than last year across the board, b) may spend more if they are able to pay with a secure cash equivalent.
The latest data based on our online shopping index did show that consumers are delaying purchases because of the economy, almost 48% are delaying, with women especially impacted by the credit crunch. The next set of data to cover this topic in detail and to cover the spending intentions for the holiday season will come out at the end of Oct and you can check it out on http://www.ebillme.com
We will be doing a detailed data release shortly on this data.
We ran a related poll and found similar results. 54% are making no lifestyle/spending changes or small changes, and 46% are making medium or large changes.
We too found women to be more likely to be holding off on a purchase.
The poll is at http://www.ask500people.com/qu.....ys-economy
(Demographic data is under the map, on the “Votes” tab.)
Whatever, there is always tit for tat…. Yaa, i too agree that Economy is falling right now…. but every ends giving some waves about fresh starting. so there is not much to think about.
& never forget the legend concept of “Fun with Dick & Jane”.
After all Christmas is Christmas !!
lets see, I heard Consumer Confidence yesterday was high. You say it’s low.
Is this tech news? especially if it’s in dispute?
I think search will be hot this holiday season… a lot more people making purchases online to save gas and get better deals… plus, more people researching online to make wiser purchasing decisions this season.
I still think people will shop just as much but at different stores for obvious reasons. Instead of going to JCrew, perhaps they’ll consider TJ Maxx. Some retailers will feel the boost while others will get beaten.
i can see the american consumer boycotting the holiday and go back to family values and change our habits to wanting the things you need instead of all the things you want. NOT! This country use to tell you to save your money but how can you save when they want you to spend every last penny? If american consumers fall for that holiday spending spree they deserve to go bankrupt b/c americans never stop spending all year round. This behavior has finally caught up to us and now that americans are slowing down spending to save we are going to spend it all up come the holidays..1 step forward 2 steps back.
Americans are entirely too hard-coded to go spend their asses off during the holidays.
When even my momma does 90% of her holiday shopping online, i think there is plenty of to go around, plus she has her ’stimulus’ check burning a whole in her pocket.
But keep up with the doom and gloom stories, it makes everyone feel grrrrreat!!
GO CUBBIES!!!
reposted with spelling errors omitted:
Americans are entirely too hard-coded to go spend their asses off during the holidays.
When even my momma does 90% of her holiday shopping online, i think there is plenty to go around, plus she has her ’stimulus’ check burning a hole in her pocket.
But keep up with the doom and gloom stories, it makes everyone feel grrrrreat!!
GO CUBBIES!!!
TC: What’s the percentage of sites earning from ecommerce vs. ad revenue? How about ad spending under these conditions. What’s in store for the glut of vertical ad networks?
CG
How can people from Lehman Brothers still express their opinion about anything that has to do with financial forecasts and, even worse, still get some some attention?
If they had any clue about the future of markets then Lehman Brother wouldn’t be called Barclays Capital, right?
8% growth year over year is still significant and means higher visitor traffic than ever for online retailers this holiday season. There are a few key things retailers should be considering to make sure they are ready for the season, and convert holiday customers into loyal customers for the rest of the year:
1. Can our site accommodate expected visitor demand?
2. What does our site performance look like currently at slow times and busy times?
3. If our site does become overloaded, does our e-store respond gracefully?
The company I work for, http://www.alertsite.com, provides several Web site monitoring services that help e-stores understand site scalability as well as availability and performance.
HEY, THE ECONOMY IS IN THE SH*TTER, UNEMPLOYMENT CLAIMS ARE AT 7%, WE’RE IN DEBT UP TO OUR EYEBALLS, AND THERE ARE ABOUT 1 MILLION FORCLOSURES A MONTH.
AND NOW SOME GENIUS DECLARES XMAS WILL BE SLOW.
THANK GOD FOR INDUSTRY ANALYSTS. WHERE WOULD WE BE WITHOUT THEM?
HERE’S MY ANALYSIS: “NOVEMBER TO PRECEDE DECEMBER.”
PYMWYMI > Put Your Money Where Your Mouth Is
I called Apple $120 OCT PUTS a good bet on June 29th when it was trading at ~ $174. Didn’t need Lehman Brothers, of all people, to point out the obvious.
Today, Apple closed at $97. Can you say killing?
Here is the post:
http://blog.agoracom.com/?s=apple+puts
Regards,
George
I think people will still shop, just they will look more for bargains now.
http://gatesandjobs.blogspot.com/
So now I guess we have a definition of the much discussed Internet Nuclear Winter. Looks like the mainstream press is really screwed on this one. “Up 8%” just doesn’t sound as scary as “Nuclear Winter”.
Great Job on breaking this Eric! I’m sorry, however, that you will have to be booted out of the Journalist’s Union for not towing the line on reporting the panic. Proper protocol is to start every post with “The end of the world as we know it is now at hand”, which you did follow. However, you are then supposed to maintain solidarity with your fellow print journalists by saying that this Internet Fad Thing has finally run its course and will now go away. They can all safely return to their print magazines and newspapers with no worries. People of the future will mostly just use their iPhones to find the nearest magazine stand. (And even that only in the unlikely event that Steve Jobs is still alive and Apple is still in business).
>>Come on, is this even really news? The economy sucks, jobs are being lost
>>unemployment is high and the whole banking industry needs a government
>>bailout to keep doing business.
This is an example of how psychology is a big part of the current environment. There are real down points in the economy but it seems public sentiment has been made worse by the high press visibility of the bailout legislation.