The online musical instruments marketplace offers up to one year of financing to buyers through an online payment service from Affirm.
Online sales inched up in January by 2% from a year earlier to $10.87 billion, comScore reported today. By contrast, the U.S. Commerce Department’s preliminary retail sales estimate for January reports sales down 5.8% from a year ago.
Online sales inched up in January by 2% over online sales a year earlier to $10.87 billion, Internet usage measurement company comScore Inc. reported today. By historical standards, the growth wasn’t much, but it represented a significant swing from the 3% decline in sales that online retailing experienced in last year’s fourth quarter.
It also represented growth in the face of a decline in overall retail sales. The U.S. Commerce Department’s preliminary retail sales estimate for January, excluding automobiles and auto parts, reports sales down 5.8% from January 2008.
“E-commerce is outperforming on a relative basis the rest of the retail sector,” comScore chairman Gian Fulgoni said in a webinar today presenting comScore’s latest data. “E-commerce clearly continues to gain share of wallet.”
While Fulgoni remains optimistic about the future of online retailing, believing, for instance, that once the economy recovers, e-retailing will resume its double-digit growth rates, he offered several cautionary notes about the state of the market. For one thing, upper-income consumers who kept the 3% fall in Q4 from being any worse have reduced the growth in their online spending. In Q4, consumers with income of $100,000 and greater spent 17% more online than they did in Q4 a year earlier. In January, growth in that segment was 8%.
In addition, those same consumers indicated they are cutting back their spending. ComScore asked its consumer panel about spending plans in October and again in January. In October, 67% of $100,000+ households said they were cutting back their spending; that amount increased to 78% in January. Meanwhile, 46% of those consumers said they expect the economy to get worse in the next three months. “Their confidence has been so rocked that they are likely to very, very conservative spenders,” Fulgoni said.
One bright spot in the consumer survey portion of comScore’s data was that consumers with $50,000 to $99,999 in household income increased their online spending in January by 2%, after decreasing online spending by 10% in the fourth quarter. Interestingly, the proportion of those consumers who said they were cutting their spending rose from 74% in October to 85% in January.
ComScore data also shows that the state of the economy has made consumers more budget-conscious shoppers. In December online search activity related to coupons was up 157% over a year earlier and traffic to online coupon sites was up 46% over a year earlier, Fulgoni reported. In addition, 76 million Internet users shopped at comparison sites in December vs. 72.4 million a year earlier.
Fulgoni also reported an interesting swing in sales share by retail segment. In Q4 2008, 48% of online sales took place at sites operated by multi-channel merchants vs. web-only merchants. That proportion contracted to 44% in January. “It might present an opportunity to build business by increasing their focus on online throughout the year,” Fulgoni said.