Online retail spending in October grew by only 1 percent compared to October 2007, representing the lowest monthly growth rate since 2001, according to a report from comScore who began tracking ecommerce seven years ago.
The report said that the softness in online retail spending was due in part by negative spending growth in households earning less than $50,000 a year.
“While rising prices remained consumers’ biggest concern in October, it’s clear that the increase in the country’s unemployment rate along with the shock of the financial market meltdown have had a negative impact on the psyche of the American consumer, and the effects were clearly felt in the online retail sector,” said comScore chairman, Gian Fulgoni.
“October represented the softest single-month of online retail growth on record, and we can only hope that the recent sharp drop in oil prices will cause a continued easing of inflation and a strengthening in consumer spending as we enter the critical holiday shopping season.”
Overall, online retail spending from August through October grew 4 percent compared to a year ago, with spending dipping by 3 percent among households making less than $50,000.
Households with income between $50,000 and $100,000 showed a slight positive spending growth of 1 percent, while those earning at least $100,000 increased their spending at a solid rate of 14 percent.
“It’s clear that worry, concern and even fear are the prevailing consumer sentiments at the moment, and this is causing all income segments to pull back their spending,” added Fulgoni.
“With the financial markets still volatile and more job cuts looming, it would appear the only near term ray of hope for this year’s holiday shopping season is that the sharp drop in oil prices will cause an easing in inflation and provide a much needed boost in consumers’ spending power.”
