Seeing Your Conversions Lower? Pre-Holiday Slow Down.
October 24, 2008 by Pablo Palatnik
We’re nearing the end of October which has been a disaster in the economy to say the least. Markets worldwide are tumbling and the media has instilled a fear in people that makes you almost want to shoot yourself with how bad things are getting.
BUT, I’m sure most of you (those who own ecommerce websites) are seeing a slow down. It’s attributed to a few factors, obviously the biggest one being a weakened economy caused by job loss, housing markets, etc. Nevertheless, October has been usually a month of slowdown before the holiday season begins.
About a week ago it was reported that retail numbers in the US hit a 3 year low. Sales decreased 1.2 percent last month, nearly double the 0.7 percent drop that had been expected. It was the biggest decline since retail sales fell by 1.4 percent in August 2005.
It should be no surprise as people are strapped for cash, and we are in a recession (time to start calling it as it is) consumer spending is going to drop significantly, it already has. This also has a lot to do with it being an election year which after the elections, things will become a lot more stable. Although the pre-holiday slow down is expected, and we are in it right now, the outlook for the holidays may not be as bad as some may expect.
YES, this holiday season probably wont be like others, but online giants such as Amazon and eBay still expect to see a growth in revenue during what is always their strongest quaters. People are saving until the holidays come around.
According to AdWeek, “This year, online holiday sales (excluding travel) will total $32.1 billion, up slightly more than 10 percent over 2007. This is a sharp decline from growth rates in the low-to-mid 20 percent range seen over the past few years.
The weak economy is placing downward pressure on e-commerce sales this season. That pressure accentuates the already declining sales growth, which is a sign of the maturation of the online shopping channel.
Shoppers will shift a larger share of their purchases from stores to the Internet to save gas money and avail themselves of retailers’ free shipping offers.”
I think November will be a telling month to this story.
