Study: Online Sales Fell in May

Consumers spent US$3.9 billion online in May — a 9 percent decrease from the $4.3 billion racked up in Internet sales in April — according to data released Monday by Forrester Research and Greenfield Online.

Forrester research director James McQuivey hesitated to label the sales decrease as a slump, however.

“The ‘slump’ could be seasonal, it could be the economy, and it could not be a slump at all,” McQuivey told the E-Commerce Times. “We’ll have to stay tuned to see what June does.”

Forrester and Greenfield did find that last month’s e-tail spending outpaced the $3.4 billion spent by Web shoppers in May 2000 by approximately 15 percent.

However, the Forrester Online Retail Index, which compiled data from 5,000 online shoppers concerning their purchasing history, concluded that the average amount that shoppers shelled out online dipped from $273 per person in April to $265 in May.

At the same time, the number of households shopping online fell to 14.8 million in May from 15.7 million the previous month, the research firms said.

Overall, sales of big-ticket items were hit hardest by the slump, falling 11 percent, to $2.35 billion in May from $2.64 billion in April. Sales of small-ticket items dipped 4 percent, falling to $1.58 billion from $1.65 billion.

Falling Travel Sales

Even travel, lately one of the strongest e-commerce sectors, was not immune from the sales dip, according to the study. Airline ticket sales dipped to $698 million in May from $776 million in April, and car rentals decreased to $174 million from $247 million.

The study also said that online hotel reservations decreased to $367 million in May, compared to $512 million the previous month.

Because travel was the primary reason for the May decline, McQuivey said the dip could be a seasonal reflection of the fact that consumers purchased their summer travel tickets during April and not May.

Dip Dip Dip

Among the other retail categories that posted the biggest declines were small appliances, health and beauty products, garden supplies and jewelry, the study said.

Internet sales of small appliances fell to $36 million in May from $89 million in April, and sales of health and beauty supplies online dropped to $103 million from $172 million.

Jewelry sales via the Web dropped to $73 million in May from $104 million in April and online sales of garden supplies dipped to $35 million from $52 million, the report said.

Bright Spots

Despite an overall drop in spending, some categories — including consumer electronics, videos, sporting goods and flowers — did post gains during the month.For example, consumer electronics spending jumped to $203 million from $154 million.

Online sales of videos jumped to $107 million in May from $66 million in April. Online sales of sporting goods increased to $79 million from $45 million. Likewise, sales of flowers via the Web improved to $95 million from $66 million.

2 Comments

  • You know, if I could find a stinking job, maybe I’d be more likely to buy music. Well, if there was anything worth buying. And I could find a job.

  • Certainly one month doesn’t establish a trend. And led by big-ticket item declines could be a general economy effect. Many current e-tailers have survived the “dot-com” crash and once security, privacy and technological reliability concerns are solved should see continued growth.

    Accelerated roll-out of high-speed DSL service will also give B2C sales a boost.

    Frank B. Leibold, Ph.D.

    President, LEIBOLD & ASSOCIATES

    http://home.att.net/~f.leibold/

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