Online Retail Slows to Near Halt, Still Up From One Year Ago

Comscore has released e-commerce growth numbers for the start of Q4 October, which shows that growth has slowed to an anorexic 1% during the past month compared to last October.

Source: TechFlash.com

While this may seem to some to be a doom, gloom, jump off the bridge type of scenario, the silver lining here is that there was still growth year over year during the past month.

In other words, the online retail market is outperforming itself today compared to one year ago. If we were to survey online merchants and asked them how they thought online retail had done last month, many would think it would have been down from last year.

Historically of course, the Q4 shopping season is usually much more profitable for most retailers, with certain merchants getting 200-300%+ more sales compared to other, slower times of the year.

So for last month’s October to have been higher than they have in the history of e-commerce is a sign that consumers have simply not given up purchasing things online.

On the other side of the coin of course, such stagnant growth is certainly not an ideal scenario for merchants selling online, as they would like to see growth in overall consumer spend relative to the growth in online retailers.

The 1% growth is most likely due to more retailers flooding the online world giving conusmers more options, rather than consumers spending more money on any individual site–so at such minute growth one can conclude that more often than not, individual retailers are actually losing revenue since the pie has suddenly been divided into more pieces, while remaining the same size.

It will be very interesting to see how the rest of the quarter/year plays out, for if the trend continues we may see actually see a decline in the November/December months.

Still, a slight drop in sales during the winter season will still likely result in the most profitable quarter of the year for most retailers by a fair margin.