August 11, 2010, 10:10 AM

More sales sans discounts boost health of e-commerce, index shows

MyBuys says more shoppers are buying goods at full price.

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Online sales of full-priced items were up 11% in July compared with July 2009, and sales of discounted items accounted for an average of 15% of total orders, down from 24% the previous July, according to the MyBuys E-commerce Wellness Index. Further, the average depth of discount dropped three percentage points to 25%.

As a result, the health of the industry has dramatically improved from last year even though total revenue for the month decreased 4% compared to the same period one year ago, according to the index, a monthly measure based on data from the e-retailer clients of MyBuys Inc., a vendor of product recommendation technology that serves more than 150 web merchants. The study covers MyBuys clients that were active both in July 2010 and July 2009.

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 July result for the index score—a composite of all the percentage changes—came in at an increase of 8.3% compared with July 2009.

“There has been a continuing trend in 2010 that highlights retailers’ moves to reduce the promotion levels from extremely high 2009 promotion amounts. The fall in revenue has been minimal as shoppers have continued to purchase more orders at full price than at a discount,” says Robert Cell, CEO of MyBuys.  “Retailers continue to improve their bottom lines versus last year by implementing revenue creation strategies that are less promotion-centric, like personalization, and we are excited to see continued improvements in health of the sector throughout the rest of 2010.”

The MyBuys E-commerce Wellness Index also measures the efficacy of product recommendations in online shopping. Retailers saw an 18% increase in average order value for transactions with this kind of personalization compared with sales without personalization.

 

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