December 15, 2009, 12:00 AM

Web retailers sold more but sacrificed margin last month, MyBuys study says

Online retail sales were up 4.4% in November, but sales of discounted items were up more than 120% over the previous November, and the depth of discounts increased to just over 26%, according to research conducted by MyBuys for Internet Retailer.

Zak Stambor

Managing Editor

Online retail sales were up 4.4% in November, but the economic health of online retailers was down 1%, according to a monthly study of 150 e-retailer clients of MyBuys Inc. that the personalization technology firm conducts exclusively for Internet Retailer.

Revenue was not “healthy” because sales of discounted items in November were up more than 120% over the previous November and the depth of discounts increased to just over 26% in November 2009, up from a discount level of 24% last year, according to the MyBuys E-commerce Wellness Index.

The index seeks to measure the health of e-retailing by aggregating total sales, non-promoted sales, discounted sales performance, depth of discounts and average order value from the product recommendations technology vendor’s more than 150 retail clients across numerous product categories; 40 of the merchants are in the Internet Retailer Top 500 Guide. The E-commerce Wellness Index also measures consumer impulse response to product recommendations by tracking how many shoppers click on recommendations and how many buy them.

In addition to sales of discounted items and the depth of discounts being up, online retailers in November saw revenue drop 3.4% on non-promoted goods from the same period one year prior. Taking these factors into account, the overall industry health as measured by the MyBuys E-commerce Wellness Index was down 0.9%.

“Based on the trends we’re seeing, retailers will be challenged to maintain top-line growth if they wean themselves too quickly from the discount-driven strategies that were prevalent in 2009,” says Robert Cell, MyBuys CEO. “To counter this, retailers must shift their focus to strategies that encourage full price purchasing, such as targeting newly released products at relevant shoppers with a high propensity to buy.”

Comments | 1 Response

  • Caveat emptor is my advice to online buyers (those who order items from Internet Retailers). When I ordered an $880 item from Cymax.com, they immediately billed my credit card. Their website stated that the item would be delivered within 3 days of my order date, I waited a week and did not see that anything had been delivered, so an email was submitted to them. I waited another week, and no response was forthcoming. I sent them a second email, again complete with my order number and queries. Still no response. Two weeks after placing the order, I make a phone call and was told they did not have the item; in fact, the item was discontinued and they would not be mailing anything to me. Nothing was said to me about the credit card charge. Later that same day, I emailed Cymax, telling them to rescind their charge. Their next day emailed response was that my refund request would be given "a high priority so that it gets looked at quickly" - as if there was any other option for them. Of course, i immediately contacted AmEx and told them that the Cymax charge item was a bogus item and that it was not going to be paid since no product or service was provided me by Cymax. The point of all this is that online retailers seem to automatically charge customers their prices without even determining whether or not they can deliver their advertised products. Potential customers need to be alerted and informed of this insidious practice.

Sign In to Make a Comment

Comments are moderated by Internet Retailer and can be removed.

Not a member? Signup for free today!

Advertisement

Advertisement

Advertisement

Relevant Commentary

FPO

Jason Squardo / Mobile Commerce

Five tips for achieving high mobile search rankings

Searches on mobile devices will soon exceed those on computers, Google says. Retailers that keep ...

FPO

Sergio Pereira / B2B E-Commerce

Quill turns to its B2B customers for new ideas

Coming in April is a new section of Quill.com that will let customers and Quill ...

Advertisement