February 12, 2010, 12:00 AM

January was an unhealthy month for e-commerce, new data shows

January web sales dropped 7.5% year-over-year, as revenue from products sold at full price fell 11% and revenue from discounted items rose 44%, according to a study of 150 e-retailer clients of MyBuys provided exclusively to Internet Retailer.

Lead Photo

Bob Cell, CEO of MyBuys

 

Web sales in January dropped 7.5% year-over-year during an “unhealthy” month, according to a study of 150 e-retailer clients of MyBuys Inc. that the personalization technology firm provides exclusively to Internet Retailer.

 

Adding to January’s unhealthiness, total revenue from items sold at list price decreased 11%, a stark contrast to the 30% increase in full-price sales from the prior month, according to the MyBuys E-commerce Wellness Index.

What’s more, total revenue from discounted items increased 44% in January, up substantially from the 19% increase in December. And the average discount rate increased 13%, growing from just under 26% in January 2009 to more than 29%.

The overall January result is the MyBuys E-Commerce Wellness Index score-a composite of all the percentage changes-of -10%, the lowest number registered since the index was created last August.

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; 52 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 January, the average order value for orders that contained recommended products was 19% higher than those orders without ones, the study shows.

“December was a strong showing for e-commerce, with the index hitting an all-time high of 20%, but the upward trend was short-lived as January came in at a new record low,” says Robert Cell, MyBuys CEO. “The strength of December’s sales more than offset the downturn in January, but the slow start to the year creates a hole that retailers will need to fill in order to climb back into positive growth for 2010. While sales of discounted items grew by nearly half, this was not enough to counter the downward movement in full-priced goods. The bright spot continues to be strategies such as personalization, which steadily proves to be an effective, reliable strategy for increasing sales of non-discounted products.”

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