Consumers Were More Price-Conscious in Q2
Recent changes in the economic climate are affecting consumer spending behavior and may mean more conservative shopping habits are coming this holiday season.
That’s according to Channel Intelligence, which contends that although same-seller, year-over-year sales were up 30 percent across all channels for the company’s retail clients in the second quarter of 2011, average sales price was down 15 percent across all channels for its large national retail clients.
“Our analysis tells us consumer confidence may still be weak, because price seems to be a major consideration right now for online shoppers,” said Rob Wight, CI’s CEO. “The good news is that consumers are spending. But it is worth noting that they are buying less-expensive items. This might be an indicator of what spending habits will be like during the holiday season.”
Wight said CI’s software handles nearly 15 percent of all online commerce in the United States, and that a deep dive into the company's data reveals the shift from offline to online shopping is accelerating more rapidly than the industry acknowledges.
“Last week, ComScore reported that U.S. retail e-commerce spending went up 14 percent in the second quarter of 2011 versus a year ago,” Wight said. “The real story is that orders grew 22 percent, which validates that people are shopping more online. And while the industry increased orders by 22 percent, we increased orders for our clients by 51 percent.”
CI also reports that sales conversion rates jumped 63 percent in the second quarter for retailers using CI Product Search. The surge in conversions is a good sign for retailers who invest in optimizing their data feeds to take advantage of the product search platform, which helps shoppers find products quickly and easily.
CI offered the following observations regarding current online shopping behavior:
• The product search conversion rate is up 63 percent while the comparison shopping engine conversion rate declined 8 percent. This suggests online consumers favor product search over shopping engines. Retailers must optimize their data feeds for product search in order to stay competitive this season.
• Consumer confidence is likely to further deteriorate in light of current economic conditions, so shoppers will continue to look for the lowest price rather than favored brands.
• There will be a significant increase in online shopping this holiday season. With gas prices still high and retailers offering discounts, free shipping and faster delivery this year, consumers are likely to shop online and avoid store traffic.
Founded in 1999, Channel Intelligence offers the most complete suite of performance-based e-commerce services in the industry. With offices in Orlando, Fla.; Philadelphia; Scottsdale, Ariz.; Portland, Ore.; London; and Shanghai, the company drives $2 billion annually in referred sales online in computing, home improvement, appliances, consumer electronics, toys and a variety of other consumer packaged goods.