Recently I was able to participate in a comScore webinar entitled: State of the U.S. Online Retail Economy in Q1 2010. Here are some of the things that I learned:
Although there is still a lot of progress to be made, the U.S. online retail economy has finally begun to show some signs of recovery. According to a comScore, e-commerce has grown significantly, and sales are up 6% (from last year). This quarter is the first, since the recession hit, when e-commerce spending has been more than 8%. Since the Recovery and Reinvestment Act, GDP has stopped declining and begun increasing again. There has been a positive growth in GDP in Q1 of 2010, but this is not necessarily a sign of economic progress. The job market is still painting a gloomy picture, and it comes as no surprise that unemployment remains the top economic concern among consumers. Consumer sentiment about the current state of the economy is improving, although many are still pessimistic overall.
A greater focus on price and spending has caused consumers to turn to the Internet more than in the past. They have also found themselves “trading down” as a means of coping with decreased spending power, and brand loyalty has become less of a priority than saving money. Coupon sites have also increased in importance and popularity, as have cost saving offers like free shipping. Although consumers are still cutting back on spending, all income segments have seen an increase in growth in retail spending since a year ago. More than half of the major retail segments out-performed the total quarterly e-commerce growth rate of 10%, compared to a year ago.
There has been an increase in the use of social media and group buying sites to reach consumers. People are spending one out of every twelve minutes online, and it has been observed that social media users are also heavy online spenders. In addition to the more traditional social networks, group buying sites have seen significant growth in Q1 2010, and flash sale sites continue to grow.
Twitter continues to have a high awareness, even among those who have never used the site. Of those who do use it, 23% follow businesses to find special deals, promotions or sales, reviews and opinions. comScore believes that certain social media myths, such as that the audience is all young people with no money, and that low ad click through rates equal low performance, may be responsible for advertisers’ reluctance to advertise on social media. However, it is clear that those who give into these myths are missing opportunities to reach large groups of people who are already active online.
By Samantha Karol, Sr. Marketing Assistant
Welcome back to the CPX Interactive Blog! If you haven't already, you may want to subscribe to our RSS feed, and be sure to connect with CPX across the Web! Thanks for visiting!
