US Online Retail Growth Slows

20 November 2008

CHICAGO: The growth of US online retail spending fell to its lowest level in seven years during October, posting a year-on-year improvement of just 1% as the economic downturn impacts on consumers.

Online market research firm comScore reports that middle-to-lower earning families, defined as having an income of less than $50,000 (€39,620; £33,216) per year, are now said to be spending little or nothing via the web.

Households with an annual income of $50,000 to $100,000, which are responsible for 45% of online retail spending, increased their outlay by just 1% for the three months to the end of October.

Andrew Lipsman, marketing communications manager at comScore, says: "It's clear that consumers have less disposable income and as a result, ecommerce is going to suffer."

He is also pessimistic regarding future online retail growth levels, arguing: "I think it's safe to say we aren't going to see growth rates anywhere near to what we've seen in past years."

  • Underscoring comScore's assessment of online retailing, equity and securities specialist Lazard Capital Markets has revised down Amazon's probable Q4 earnings from $6.6 billion (€5.2bn; £4.4bn) to $6.5 billion, as the online retail giant remains "in a period of high uncertainty with slowing growth and declining incremental margins".
  • Data sourced from Wall Street Journal; additional content by WARC staff