August 4, 2010, 2:06 PM

Online spending grew almost 11% in July

MasterCard spending report shows e-commerce returning to double-digit growth.

Thad Rueter

Senior Editor

Lead Photo

E-commerce sales grew 10.9% year over year in July, regaining double-digit growth after slipping into single digits in June, MasterCard Advisors reported today in its monthly SpendingPulse report. The e-commerce growth stood in stark contract to overall retail spending, which was flat in July, MasterCard says.

The SpendingPulse report, from MasterCard Worldwide consulting unit MasterCard Advisors, provides estimates for retail sales from all payment forms, not just MasterCard cards. MasterCard does not release actual spending figures.

Apparel e-commerce spending increased 13.7% year over year in July, the eighth month in a row the sector posted double-digit gains. The growth in online apparel for July, however, was smaller than for June, when spending increased 18.6% year over year, MasterCard says. E-commerce spending on family apparel, meanwhile, increased 22.2% year over year in July.

E-commerce department store spending decreased 1.9%, one of the few e-commerce categories that showed no growth, MasterCard says. Spending in this category had increased by double-digit rates for seven months.

Overalls, spending in all retail and service categories generally remained flat compared with July 2009, the report says. The lack of growth contrasts with sharper overall growth in the first quarter of 2010, MasterCard says.

“Retail sales continued to tread water, following the pattern set with June’s sales when consumers demonstrated a reluctance to make larger purchases, and instead, traded down,” says Michael McNamara, vice president, research and analysis, for SpendingPulse. “Particularly, we are noticing some weakness in industry sectors that rely on higher-priced ticket items such as furniture, and discretionary areas such as luxury and jewelry.”

Comments | 1 Response

  • I hesitate to trust that growth numbers in reports like these show the entire picture. Right now retailers are implementing aggressive sales campaigns (i.e. Christmas in July) which explains the rise in spending, but raises questions about the actual impact on profitability. Businesses - especially smaller e-commerce businesses - need to focus more on implementing programs and campaigns that will attract shoppers both before and during the rise in consumer spending. Knowing what types of deals and promotions will resonate with the consumer, while sustaining profitability, is the key. -- Christian Gordun CEO of Coupon Craze

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