If you’re having conversations with your boss about increasing your e-commerce budget and building online strategies, the numbers will back you up.
Michael McNamara, vice president, SpendingPulse, MasterCard, said the market share shift toward online is continuing to grow. “There’s a lot of shifting to the online channel and that’s how budgets should be allocated,” he said. He noted e-commerce has shown “impressive growth in the last year.”
This story first appeared in the October 27, 2010 issue of WWD. Subscribe Today.
Although coming off a smaller base, e-commerce is growing at a significantly higher percentage than overall retail. In September, total e-commerce rose 7.8 percent; apparel e-commerce was up 13.4 percent; children’s e-commerce gained 14.4 percent, women’s apparel e-commerce rose only 1 percent, and jewelry was off 5.9 percent, versus a year ago.
Looking at the pace of online business this year, he noted that in the first quarter, there were online peaks in terms of share. He attributed that to bad weather (more people were indoors) and the fact that most people are at work and not on vacation. The peak occurred in January when e-commerce reached 18.6 percent of sales. He explained these are big movements that reflect a lot of money shifting to the online channel.
He pointed out that in women’s apparel, e-commerce has grown from a 9 percent share in 2007 to 13.8 percent of total sales year-to-date in 2010, and the year’s not over yet. But, they’re not seeing the same progress in jewelry as they’re seeing in apparel categories. Most jewelry is done during the holiday season, with the biggest days for jewelry sales from Dec. 21 to Dec. 24.
He noted that online holiday sales will ramp up on Nov. 9 with 14 of the top 50 online spending days in the last 22 days of the month. The top spending online day is expected to be Dec. 14., and the biggest day for retail overall is Nov. 26, which is forecast to do $19 billion in sales. The top 10-day total is estimated to be a $151 billion spending opportunity.