The search giant today launched an app called Inbox that could force retailers to change their e-mail marketing strategies.
While 55% of web purchases are made with credit cards today, according to one research firm, that could change as banks cut credit lines at the same time as many consumers turn thrifty.
Many consumers voluntarily cut back spending during the recent holiday season as the economic crisis deepened. But others may have been forced to cut back as they found their credit card limits reduced by card issuers.
Many banks cut credit card limits in the fall, and deeper cuts are coming, some experts believe. While 55% of web purchases are made with credit cards today, according to research and consulting firm Javelin Strategy & Research, that could change as banks cut credit lines at the same time as many consumers turn thrifty.
While consumers repeatedly told pollsters during the fall they planned to spend less on holiday gifts-suggesting the 3% decline in online holiday sales reported by comScore Inc. was largely voluntary-it’s not clear what role reduced credit availability played in the dip in sales.
A surge in credit card declines would be a sign of a credit crunch, but the evidence on that is mixed. Litle & Co., which specializes in processing payments for online and catalog merchants, says credit card declines increased 4% in October and November, but stabilized in December. Online jewelry retailer Goldspeed.com says card issuers turned down 14% more transactions in November and December over a year earlier, and discounter Overstock.com says declines were up slightly in December to 3%. But several other retailers report no significant increase in consumer cards being turned down, including computer retailer TigerDirect, web and TV merchant Jewelry Television, discounter Buy.com, and Wine Enthusiast, which sells wine accessories.
However, some of those retailers noted anecdotal evidence of consumers lacking credit on their cards or being reluctant to use them. Jeff Wisot, vice president of marketing at Buy.com, says it was more common this year for customers to buy several items and charge them to different cards. At Wine Enthusiast, call center agents reported more consumers calling several times to discuss a major purchase, such as a wine cooler, but hesitating to buy.
“Agents would say to these customers, ‘This is your third call, what’s preventing you from buying it?’” says Francis Juliano, chief marketing and information officer at Wine Enthusiast. “The customer would say, ‘I have money saved for it but I don’t want to spend it because my best friend just lost his job. I’d like to finance this.’”