'Fiscal cliff' fears blamed for flat online holiday spending growth
Consumer spending online was up 14 percent over last year but relatively flat compared with expected growth rates that were in excess of 16 percent, ComScore concludes.
Growing fears of an impending economic crisis in the new year apparently led to weaker-than-expected U.S. online holiday sales results.
Consumers spent $42.3 billion online during the November-December holiday shopping season, a 14 percent increase over 2011, according to data released today by ComScore. While online shopping set some spending records, overall growth was largely flat, the market analyst concluded.
"This year's growth rate is essentially on a par with last year's," ComScore Chairman Gian Fulgoni said in a statement. "But despite many positives for the online sector, this year's season did not quite perform up to our initial expectation for growth rates in excess of 16 percent as we fell a billion dollars short of our expected total of $43.4 billion."
The research firm noted that while there were record spending days in November, consumer confidence dropped dramatically in December.
"While November started out at a very healthy 16-percent growth rate through the promotional period of Thanksgiving, Black Friday, and Cyber Monday, consumers almost immediately pulled back on spending, apparently due to concerns over the looming fiscal cliff and what that might mean for their household budgets in 2013. With Congress deadlocked throughout December, growth rates softened even further and never quite made up enough ground to reach our original expectation."
"You might say that had it not been for Congress, every other indicator suggested it would have been an even merrier Christmas for online retailers," he said.
While overall spending was a bit disappointing, record spending on key days and during an entire week gave online retailers some reason to rejoice. December itself started out strong,in U.S. history during the week of December 8 through 14, when consumers spent $6.9 billion online.
The online shopping season got off to an optimistic start, withonline the day after Thanksgiving, a 26 percent increase over last year's Black Friday. Just a few days later, consumers in the U.S. would on Cyber Monday, up 17 percent from a year ago.
ComScore's week-by-week breakdown of online consumer spending during the 2012 holiday shopping season: