Retail e-commerce growth in the US drops sharply

2008 had already been shaping up to be the weakest holiday season yet for retail e-commerce. Based on just-released third-quarter e-commerce data from the US Department of Commerce (DOC), eMarketer is predicting even more anemic growth—both for the holiday and the year. 

The DOC estimated that e-commerce sales grew only 4.6% in the third-quarter of 2008, compared with the third quarter of 2007. 

In May 2008, eMarketer projected that retail e-commerce sales growth would drop to 14.3% this year compared with 2007. Benchmarked against the new DOC data, eMarketer predicts 2008 will now be the first year of single-digit growth of the decade. 

Online sales (excluding travel) will total nearly $137 billion in 2008, up 7.2% year-over-year, compared with last year’s 19.8% growth rate. 

eMarketer expects that consumers will spend only $30.3 billion online in November and December this year. Its May number was a mere 10.1% growth over last year’s holiday spending. But the new estimate is for just 4% growth. 

The weak economy is placing downward pressure on e-commerce sales this season. Online shopping growth had already been slowing naturally as part of the channel's maturation; the economy is slowing growth even more. 

“Hopefully, we’re nearing the bottom of this,” says Jeffrey Grau, eMarketer’s e-commerce analyst. “People are going to be more frugal this holiday season."

Source: eMarketer