March web sales rose 3% as retailers sold more items at full price

An index that aims to measure the profitability of online retailing improved 6% in March compared to March 2009, the second straight increase after a period of several months in which the index fluctuated between positive and negative readings. More retailers registered sales at full price, improving the overall score of the MyBuys E-commerce Wellness Index.

The index also showed a 3% median increase in revenue for the e-retailer clients of MyBuys, a vendor of product recommendation technology that serves more than 150 web merchants. The study covers MyBuys clients that were active both in March 2010 and the same month a year before.

Growth attributed to discounted sales increased 9% during March, a far cry from the wholesale discounting that the index registered at times in 2009, when monthly increases in discounted sales reached 100% or more. At the same time, the shift back to full-price items continued as sales of non-promoted items grew 7%, the index reports. While the depth of discounting came in at 24% for the month, this is an improvement from the typical 26% discount in March 2009.

Because the index is based on the median score in each category it’s possible for median revenue to increase 3% although both discounted and non-discounted median revenue increased by a larger percentage. That’s because a particular retailer may have a large increase in discounted sales, for instance, that’s largely offset by a decrease in full-price sales, resulting in a total revenue increase of 3% or less. The 3% total revenue median is the point at which half the sample is above that revenue growth figure and half below.

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. The overall March result for the MyBuys E-Commerce Wellness Index score-a composite of all the percentage changes-came in at 6%, down from a 14% increase in February. The overall index is up 3% over the previous 90 days, indicating steady growth in online retail, MyBuys says.

“Outside of the holiday hangover we saw in January, Q1 showed positive growth in the retailing community with strong months back to back to close out the period,” says Robert Cell, MyBuys CEO. “March saw continued industry-wide growth in sales, and more importantly, a welcomed balance across discounted and non-discounted items, with growth rates of 9% and 7%, respectively. As we predicted, this is a continuing trend that shows retailers are ready to connect with their customers on a more personal level and drive growth with innovative merchandising tactics.”

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. The average order value for transactions that included recommended items was up 35% in March year over year.