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Sunday, Jun. 17, 2007 at 9:08 pm

New York Times: Online Sales Losing Steam

By Anthony Garcia
June 17th, 2007

hindenburg.jpgA recent New York Times article asks, “Has online retailing entered the Dot Calm era?

Forrester Research, a market research company, projects that online book sales will rise 11 percent this year, compared with nearly 40 percent last year. Apparel sales, which increased 61 percent last year, are expected to slow to 21 percent. And sales of pet supplies are on pace to rise 30 percent this year after climbing 81 percent last year.

Growth rates for online sales are slowing down in numerous other segments as well, including appliances, sporting goods, auto parts, computer peripherals, and even music and videos. Forrester says that sales growth is pulling back in 18 of the 24 categories it measures.

The article then speculates as to the reasons why online sales are slumping:

The slowdown is a result of several forces. Sales on the Internet are expected to reach $116 billion this year, or 5 percent of all retail sales, making it harder to maintain the same high growth rates. At the same time, consumers seem to be experiencing Internet fatigue and are changing their buying habits. (Read the entire article)

What a punch in the gut…

It cites a few more reasons, but none allude to the fact that many online shopping experiences still, um, suck. While allowing shoppers to shop online and purchase offline is still a vital health metric, we’ve watched average online conversion rates stand still (according to Shop.org and eMarketer), staying within one standard deviation for several years.

A rising tide lifts all boats, but as the tide calms, will online businesses still be able enjoy healthy growth? That depends. If yours is one of the handful of sites that’s been successful maximizing conversion and ROI, probably. But if your site’s been lifted by the tide, hold on and prepare for downtown.

Is this the 2.0 bubble starting to burst? Is this what it’s going to take to get online marketers and sellers to get serious about their subpar conversion rates?

You tell me.

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Comments (3)

  1. [...] More: New York Times: Online Sales Losing Steam. Anthony Garcia’s take on it all over at The Future [...]

  2. It would be pretty tough to grow at 40+ percent year after year. There will come a point when people are buying all that they want to buy online. I don’t think we’re anywhere near that point yet, but there are limits on what can be purchased and shipped in a timely manner.

  3. Wonderful blog, some fascinating points. I remember 2 of days ago, I have visited a similar post.

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