Posted December 29, 2008 7:22 am by with 28 comments

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While not a shock considering the way this past quarter has been going for the economy in general, the Wall Street saleschartdownJournal reported online sales declines for ecommerce for the first time ever during this past holiday shopping sales.

The numbers aren’t dramatic but some would say that just the fact that they were negative is enough. Online spending from November 1 through Christmas Eve was down 2% compared to 5.5% to 8.5% for retail as a whole. This is the first time that online sales for the holiday season have not grown. Normally we are talking about how ridiculous complaints are of growth numbers that are the envy of all (what only 15% growth, why not 35%?) but now the industry must examine how the current economy is finally impacting online business.

The most interesting thing to come out of this appears to be that if it weren’t for big players like Amazon, who had its best ever holiday sales season, the numbers may have been a lot worse. Amazon used its size and influence to offer discounts that shoppers were looking for. Other online outlets couldn’t match them and thus a lot of business may have moved to Amazon for the future as well.

Moving forward it appears as if the deep discounting that ‘saved’ the holiday season online may continue for the like of Target and others. Offers of free shipping and up to 75% off on over 30,000 items are designed to get people to buy something post holiday. Target’s overall traffic was down 9% for the holiday period.

Andrew Lipsman, ComScore’s director of industry analysis, says there are reasons why players like Amazon, Apple and Wal-Mart fared well during this downturn

Each f these sites is known for separating themselves from the field – Amazon by offering some of the widest variety of goods, while Apple provides innovative products and Wal-Mart proffers some of the lowest prices.

Once again, none of this is stunning given the current state of the economy. I guess that since most of us are not Amazon, Apple or Wal-Mart nor do we have the resources they do what’s next for the rest of industry? How does ’09 shape up for you and what do you plan to do to get through this? How did the holiday season go for you? I think we can all agree that things are just beginning to get interesting and the start of the New Year hasn’t been this uncertain in quite some time.

  • Online business is no different from offline businesses. In hard times, the survivors simply have to do things to increase their share of the market which apparently has been done successfully by Amazon etc.

    Nicole Price’s last blog post..Merry Christmas!

  • Hopefully next Holiday will make up for this one. With tax season around the corner maybe we will possibly see a spike in spending with extra cash for many coming in.

  • I heard somewhere that HMV’s sales were up this year from last year.

    Well, I’m not positive it was HMV, but a similar company (not Zavvi lol) sales were up

  • I was actually surprised to see online sales down – figured that would be the only news that remained neutral or positive. Hopefully ’09 will be better, but from what it looks like, things may get worse 🙁

    Just need to stay positive and hope for the best 🙂

  • Hey Frank,

    We wrote about this issue over on our blog too.

    I think you (and the WSJ) make a great point about why Apple, Wal-Mart, and Amazon survived. It was because each of them had a very solid focus for their businesses. You know that Amazon has almost anything you’re looking for. You know that Wal-Mart is committed to be cheaper than the competition. You know that Apple’s products are more chic and polished than the competition.

    Online retailers need to really focus on what will make them stand out from the crowd. With competition for keywords, both in PPC campaigns and for organic SEO, rises it becomes even more important that eCommerce retailers focus on finding traffic that converts to a sale.


  • Great information thank heaps. Newbie Marketer from Oz

  • Online business is struggling for its own sector market as well.That’s why it takes tries to surprise people by online sales down.

  • PS3

    I wasn’t so sure sales were going to dip when I saw the queue of people ready for the sales at 5.00am yesterday morning 🙂

    Seriously though, 2009 is going to be a toughie.

  • It’s a fact that we can all conclude, that this holiday season is one of the worst we ever had. But that is no reason to panic, but to shake our heads and look for solution to fix the problem. We simply can’t have sale increase all the time. Fluctuations are normal, and it is just a question how we fight with them. So let’s learn from mistakes and fix the problem in new year.

  • Agreed PS3, 09 will definately be hard. Although, that’s quite dependant on how much work (money) the government are willing to pour into our economy

  • Considering everything that’s going on with the economy right now, I think those numbers aren’t too bad 🙂 Also along with great prices, Amazon generally offer fantastic customer service too – any time I’ve had an issue there they always deal with it in a satisfactory manner, to the point it’s basically became my one-stop shop for everything – I usually never even hunt around for best price anymore. So the key is that they’re not just getting new customers – they’re going to keep them 🙂

    DealerDan’s last blog post..Cake Poker’s Christmas Gift To Me

  • I’ve always love telling people online sales have always gone up. …

  • PS3

    @iPhone, it isn’t just about the money government are going to put in, it’s a matter of confidence.

  • Awesome post. This post has focus very great topic.

  • It doesn’t seem like all the sales are dipping. Consoles/Console Games sales are still the same, and that specific industry doesn’t seem to have been hit by the credit crunch.

  • This is no surprise with the economy the way it is. The fact that they ended with sales less down than retail stores should be a good sign in my opinion, even though it is a negative number.

    Patrick’s last blog post..Happy New Years

  • @PS3
    Yes that too, but in theory the 2 should go hand in hand, the fact that people know the government are putting more money into the economy should IN THEORY make people more confident

  • But this isn’t true for everyone. Some companies did really well (better than before).

    Saad Kamal’s last blog post..Google PageRank Update Q4 2008

  • Its no surprise people are cutting back as much as they can.

    Bill M’s last blog post..Automakers and UAW! What’s Next?

  • I hope we don’t see the same thing next year.

    Utah SEO Pro’s last blog post..An Interview with Utah SEO Pro (Jordan Kasteler) by Martin Bowling

  • Looking at my own spending habits, my online purchases were way down and my general spending overall was much less this year.

    I am an Amazon associate (for some of my sites) and my commissions were up quite a bit 20% over last year.


  • I thought the trend would’ve been for regular retail sales to drop, with definite positive online growth. This is actually quite scary, as the big boys who can offer the best discounts are scooping the bulk of the pie, analogous to the big shopping centres and their retail giant anchor tenants put the small shops out of business.

  • I guess this spending is to be expected, but truly believe end of 09 should be much smoother!

  • Amazon did well in the holidays though. The problem for everyone else is that amazon rules the online shopping world and so, competing with that will be tough.

  • I expect just a little growth in this sector of the market and some stabilization at the end of the year.

  • I am also into commission junction. for other shops it went down but for others their profit increased a bit.

    thewutzupphilippines’s last blog post..No marriage plans yet for Rachelle Ann Go, Gab Valenciano

  • Well, this is definitely sobering news. After all, many of us believed that the internet was invincible…. Apparently it is not. It will definitely cause us to reevaluate our marketing efforts.

    Shirley’s last blog post..Perhaps You Shouldn’t Blog!

  • I am really hoping that 2009 is a lot better… I am a republican, but hopefully Obama and american innovators make a positive impact this year.