Economic Recession – Good For Online Retailers?
By Anna Johnson on July 21st, 2008A number of retailers — including Gap, Victoria’s Secret and J.C. Penney — are finding that while sales in their “bricks and mortar” stores have sharply declined… their website sales have increased just as, if not more, dramatically.
For example, while J.C. Penny experienced a 7.4 percent decrease in sales at stores open at least a year i.e. “same-store sales” (the usual measure of retail performance) web sales increased by 8.7 percent in the first quarter of this year.
While same-store sales at Victoria’s Secret dropped by 9 percent in Q1, the company’s catalog and Internet sales increased by 11 percent.
And over at Gap, while same-store sales decreased by 11 percent in the first quarter, online sales jumped by 21 percent in the same period.
Pure-play ecommerce stores are also benefiting from what The New York Times believes is a surge in ecommerce due to higher gas prices and other off-line transaction costs. Visitors to web coupon sites – sites that give customers discount coupons for shopping at various etailers – have increased by 21 percent over the past financial year to June 2008.
Meanwhile, Forrester Research predicts Internet sales to increase from $175 billion in 2007 to exceed $200 billion in 2008.
Source: Stephanie Rosenbloom, “To Save Gas, Shoppers Stay Home and Click”, July 19, 2008
