Sales dip has e-tailers eyeing holidays
Online retail sales fell in the third quarter to break a long upward trend, but researchers expect revenue to rebound in the fourth quarter buoyed by holiday-season spending.
Web retailers logged sales of $17 billion in the three months ended Sept. 30, down 15 percent from sales of $20 billion in the previous three months, according to Net forecaster Forrester Research, which calculated earnings based on data from Net measurement company ComScore Networks and shopping portal BizRate.com. Forrester attributed the dip to "ongoing economic and political uncertainty."
Still, Forrester expects U.S. online retail spending to surpass $20 billion in the fourth quarter, with sales of $9.5 billion between the Thanksgiving and Christmas holidays.
Other researchers provide estimates that paint a similarly placid picture.
In August, the Census Bureau of the Department of Commerce released a report that estimated U.S. retail e-commerce in the second quarter was $10.2 billion, up 24 percent from the same quarter in 2001. In contrast, total U.S. retail sales for the second quarter were $825.5 billion, an increase of only 2.5 percent from the same period a year ago.
Still, by its estimates, e-commerce sales for the second quarter rose by 3.7 percent from the first quarter, whereas total retail sales jumped by 11 percent in the same period, according to the Census Bureau.
Forrester's research points to major retailers eBay and Amazon.com as operating relatively unfazed to the decline in spending compared with other e-commerce players.
eBay, for example, reported gross merchandise sales of $3.77 billion in the third quarter, a year-over-year increase of 60 percent. Amazon reported sales of $851 million, a 33 percent lift from the same period a year ago. Still, Amazon introduced promotions for free shipping and launched a store for retail giant Target to maintain sales.
In the fourth quarter, an additional 4 million people will shop online compared with the previous holiday season, according to Forrester, but the overall spending per person will decrease from $463 to $433 this year.
Forrester said positive signs for holiday online shopping include the debut of Amazon's apparel clothing department, the convenience of online toy shopping and free-shipping offers.
In a separate report released this week from researcher GartnerG2, a division of Gartner, total worldwide online holiday sales were forecast to reach $38.2 billion, a 48.4 percent boost from the same period in 2001. The research also showed that for the first time, Europeans will outspend other nations on the Internet during the holiday season, with sales of $15.8 billion. North America follows with sales of $15.7 billion. Asia and Pacific Rim regions are expected to spend about $3.3 billion, according to GartnerG2.
"Retailers should be prepared for a fourth-quarter online shopping onslaught, in spite of the global recession," Michael Cruz, senior analyst for GartnerG2, said in a statement. "Markets are still maturing, so specific attention is on flawless execution for return customers. Retailers need to go where the market is; Europe is a huge online opportunity this year. Be prepared to serve those markets like never before."