Hitwise Issues Online Retail Warning

    October 15, 2008

Common sense says that online retailers are in a better position than their brick and mortar counterparts; consumers will be able save time, gas, and possibly the money that would go towards sales taxes by just shopping from home this season.  Still, according to a new Hitwise report, the winter is shaping up to be pretty harsh.

The online retail trouble started in early September, when the year-over-year difference in traffic to 500 retailers hit zero.  This was down from a respectable 10 to 15 percent seen throughout most of the rest of the year.  Then the numbers headed into the negatives, which is obviously even worse.

Retail Traffic Sinking
 Retail Traffic Sinking

Heather Dougherty notes, "These declines are the only drops in retail traffic that have occurred this year and reflect the reaction of consumers that have pulled back on spending in the current economic climate."

As for some more recent stats, she reports, "Last week, traffic to a custom category of 500 retailers (excludes auctions, classifieds, DVD rentals, and book/music/DVD of the month clubs) declined 5% from the same week during the previous year."

Online retailers will want to flaunt every advantage, then, from a lack of lines and parking problems to wider selections.  If possible, address concerns over possible problems like shipping speeds and returns, too.  With any luck, the economy will improve, but there’s little harm in being prepared for the worst.