So Ben (Bailout) Bernanke has been testifying before Congress the last couple of days, predicting a possible contraction in the first half of the year. Lovely. Though considering the Fed's predictive track record, I wouldn't hit the panic button just yet.
How all of this economic upset is going to affect e-commerce obviously continues to be the big unanswered question on Wall Street. Piper Jaffray just came out with the results of a survey of 200 consumers which, among other things, suggests that the grim spending outlook for the remainder of this year will be, well, grim.
These things move in cycles but right now, the signs point in the direction of a trough. The level of consumer confidence remains low, even after the passage of President Bush's stimulus package. The survey suggests that we're entering a period which will be punctuated by less spending on e-commerce. The highlights (or should that be "lowlights"?) include the following:
36% say they are worse off financially today compared with a year ago. While 41% reported no change, 23% indicated that things were better.
Just 31% of respondents say they are "most likely" to buy goods and services with the rebate checks. More people--40%--are planning to cut discretionary purchases while 53% plan on spending the same as in 2007.
Among the Web shoppers surveyed, 33% plan to buy fewer discretionary goods online, 55% say the amount will remain about the same while only 12% expect to purchase more.
27% of online shoppers expect to reduce what they buy. (This is an across-the-board decrease spanning consumer electronics, computers, and jewelry verticals.)
When it comes to buying high ticket items. 40% of the respondents plan to spend less than $500 per purchase. Half say things will remain unchanged while 10% expect to buy more high ticket items in 2008.