comScore chairman Gian Fulgoni, says "... each day through Thursday December 17, the last day that many online retailers would guarantee free shipping in time for Christmas, saw at least $800 million in spending... savvy consumers may have been waiting for those last-minute deals... "
Online retail sales for the holiday season are up 3.7% to $24.757 billion from $23.873 billion last year, the report says, for the period from Nov. 1 to Dec. 18. MasterCard Worldwide reported today even stronger online growth, estimating e-commerce sales increased 13.0% for the period Nov. 1-Dec. 12, and 14.4% since the Friday after Thanksgiving.
MasterCard's SpendingPulse report characterized e-commerce as "one of the stars of the season." While the SpendingPulse report does not disclose an overall figure for holiday sales, it says only five of the 10 holiday-related sectors it tracks are ahead of last year.
According to comScore, free shipping has been an especially powerful inducement to online sales this year. For the five days ended Dec. 18, 45% of web retail sales included free shipping, up from 38% during a similar period last year. With free shipping, during the week ended Dec. 6 the average order value of transactions was $134, versus $103 for the typical purchase in which the customer paid for shipping.
Heavy promotion of online sales for the Monday after Thanksgiving, a day some call Cyber Monday, is turning that day into an increasingly important one for e-retailing, an example of a self-fulfilling prophecy playing out online. Sales on that Monday, Nov. 30, totaled $887 million, making it the second-heaviest online shopping day this season, comScore says.
"... Cyber Monday... moved higher up the list than ever before," Fulgoni says. "In part... due to... pent-up consumer demand... (and) also because of the increasing marketing hoopla and promotional activity that surround the day..."
The heaviest shopping days of the holiday season are now likely past, the report says. Here are the top 10 days for online retail sales in 2009, with sales in millions, according to comScore.
Heaviest Online Shopping Days of the Season | |
Date | Sales in Million Dollars |
Tuesday, Dec. 15 | $913 |
Monday, Nov. 30 | $887 |
Tuesday, Dec. 1 | $886 |
Wednesday, Dec. 16 | $874 |
Monday, Dec. 14 | $854 |
Thursday, Dec. 10 | $852 |
Tuesday, Dec. 8 | $828 |
Thursday, Dec. 17 | $809 |
Thursday, Dec. 3 | $809 |
Wednesday, Dec. 2 | $797 |
Source: comScore, December 2009 |
For more from comScore, please visit here.
I'm staggered by the number of local news outlets (who ostensibly look out for the welfare of their local constituents) that report the 15% increase in online retail as if it were a good thing. Unless the online retailer operates in their backyard, that $914 million reflects about $90 million in lost tax revenues that aren't coming back.
Retail sales increases have historically been a proxy not only for consumer sentiment, but also the overall health of a community. A positive increase of 4% used to be a proxy for the tens of millions of dollars in sales tax that would be reinvested in local infrastructure. But no more. No one wants to be the one that connects the dots between "you save by not paying sales tax" and "your school is going to close".
As for all of the complaints that "sales tax is too tough to collect" - well, they're just too lazy to Google. As Netflix CEO Reed Hastings pointed out recently, Vertex.com is a perfectly acceptable solution provider.