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Consumers’ surging online spend sets the stage for happy holidays

woman-online-sample-sale-horiz_mo9pw9Desktop e-commerce increased 19% in April, and mobile app usage surpassed mobile web for the first time, comScore data finds.

Strong e-commerce growth in the spring likely bodes well for retailers during the holidays, says Gian Fulgoni, chairman emeritus at Comscore Inc.

“Consumers seem to be back, increasing their buying of products and not just services, such as vacations, restaurants, etc.,” Fulgoni tells Internet Retailer. “It looks like something might have changed in April.”

E-commerce on desktops grew 19% in April year over year, according to comScore, which measures the online activity of consumers. “That’s really strong. And April was strong for retailers across the board,” Fulgoni says.

“On discretionary products, [total] Retail Sales were up 5.3% in April, which is the highest level seen in years,” he says, citing U.S. Commerce Department data. In May, discretionary sales growth grew 4.4%. Discretionary spending excludes gas, food and beverages, and automobiles. For comparison purposes, comScore found that discretionary spending during November and December 2015, the peak of the holiday season, grew 4%.

In May, desktop e-commerce increased 15.5% year over year, and if early 2016 e-commerce trends hold, the coming holiday season will be stronger than in 2015, he says. “Last year was a little softer than we had anticipated, but it still was pretty good by every measure,” Fulgoni says. Holiday 2015 e-retail growth increased 13% year over year to $69.08 billion, according to comScore, slightly off projections of 14% growth to $70 billion.

Mobile sales increased nearly 60% last year during the holidays, and that trend will only grow, Fulgoni says. In Q1 2016, comScore found that mobile app usage—total visits to sites in the retail category through apps—surpassed mobile browser numbers for the first time.

“Mobile app visits were up 70% in Q1, and mobile site visits were up 40%, but there’s a user challenge because while consumers may have many apps on a phone, not many are used,” he says. Retailers with frequently used apps—think Inc., he says—will find that shift to be an advantage, especially during the holidays. “For someone who’s an Amazon Prime customer, it’s second nature to use the app. If you’re a specialty retailer where shopping frequency is much lower, consumers are less likely to use the app.” Amazon is No. 1 in the Internet Retailer 2016 Top 500 Guide.

In addition to comScore’s research, other data point to accelerating e-commerce growth.

The U.S. Commerce Department on Tuesday released May’s retail sales data, and while that report doesn’t break out e-commerce data, it found Nonstore Sales increased 12.2% and Total Retail Sales grew 2.5% year over year. Nonstore sales mostly occur online but also includes sales via catalogs, telephone and door-to-door orders. In April, nonstore sales grew 10.9%, which was faster than any of the first three months of 2016.

E-commerce sales, reported quarterly by the Commerce Department, increased 15.1% in Q1. Second-quarter e-commerce sales data will be released in August.

The annual UPS “Pulse of the Online Shopper” study, released June 8 and conducted by comScore for United Parcel Service of America Inc., finds that 51% of all purchases made by respondents are made online, up from 48% in 2015. The survey, conducted in January and February, included more than 5,000 online shoppers in the United States who make at least two online purchases in a three-month period.

Other findings from the UPS study:

  • 17% plan to shop less in store and spend more time shopping via electronic devices.
  • Smartphone use jumped 10 percentage points in the past two years to 77%, and retailers have adjusted accordingly as online shoppers report being more satisfied with mobile shopping, with satisfaction up eight points (to 73%) since last year.
  • 35% of online shoppers start their searches at online marketplaces.
  • 23% of respondents have made purchases through social media sites.
  • “The convenience of online buying is exploding,” comScore’s Fulgoni says. “Again this year the holiday season will start earlier; promotions will start earlier and well ahead of Thanksgiving. This plays into the hands of online shoppers. Through April, it looks like consumer spending is strengthening across the board. Consumers are opening their wallets again to products.”

Consumers’ disposable personal income rose 0.5% in April, compared with 0.4% in March, 0.1% in February and 0.6% in January, according to the Commerce Department’s Bureau of Economic Analysis. The personal savings rate declined slightly in April to 5.4% compared with 5.9% in March, according to the agency, another sign that consumers are spending more.

BY TRACY MAPLE Managing Editor, Digital Content

The post Consumers’ surging online spend sets the stage for happy holidays appeared first on Techtic Solutions.

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Consumers’ surging online spend sets the stage for happy holidays


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