Report: Consumers Spend Nearly $4B Online in July

Waking up from a summertime slumber, online spending increased approximately 25 percent in July, rising to US$3.98 billion from $3.2 billion in June, according to the latest Forrester Online Retail Index, released Wednesday.

In addition, the number of households shopping online increased to 14.7 million in July from 13.1 million in June, the report said.

"It's really encouraging, especially considering the large number of people on vacation or at the beach (during July)," Forrester analyst Chris Kelley told the E-Commerce Times.

Kelley said that there are a "combination of factors" why people are spending more money online.

"More towards the end of the month, people started thinking about back to school," Kelley said, "and also tax refunds came in the mail and people may have spent a little of it online as they got their checks."

According to the report, not only did overall Internet spending numbers rise in July, but the average amount spent per person increased as well. Consumers spent an average of $270 per person in July, compared with $247 in June.

"I think we'll see this trend continue to go up for the year unless something drastic happens with the economy," Kelley said. "Back to school will transition nicely into the holiday season."

Seasonal Reasoning

Software, books, music and videos all saw moderate gains in July, but the toys and video games category saw a significant spike, jumping from just over $87 million in June sales online to $162.4 million in July.

The toys and video games segment "is rebounding from taking a hit from earlier in the summer," Kelley said.

"That means it will probably be an upward trend from now until the end of the year," he added.

Big and Bigger

Meanwhile, big-ticket items, such as appliances, furniture, and travel purchases, took major strides in July. Appliances saw the biggest jump of any category measured -- going from $5.27 million in June to $45.7 million in July.

Computer hardware also saw healthy gains, hitting $335.78 million in July, compared to $232.26 million sold online in June.

Kelley said that the computer hardware and electronics categories are being significantly affected by general economic trends.

"The question is, if the economy remains slow, how many consumers will cut spending for those products overall in both on- and offline retail," Kelley said.

On the Down Side

One category that slid downward was office supplies, dropping from approximately $119.7 million in June to just over $82.7 million in July.

"Office supplies are not the biggest driver of back to school," said Kelley. "Apparel will be the big driver, not pencils and pens online."

The Forrester Online Retail Index measures, on a monthly basis, the growth and seasonality of online shopping based on data collected from online shoppers.