SOURCE: Coremetrics

March 03, 2009 09:03 ET

Coremetrics Reports Sharp Decline in Online Spending

Report Reflects Increasing Gloom Among Consumers in February

SAN MATEO, CA--(Marketwire - March 3, 2009) - The online retail sector in general registered dramatic drops in ecommerce activities in February 2009 compared to January 2009 (month over month) and February 2008 (year over year) according to Coremetrics, the leading provider of online marketing and business optimization solutions.

Among those consumers who shopped online in February, the number of items they purchased per order fell by a staggering 13 percent from the month before. Website sessions in which shoppers added items to their carts and sessions in which they went on to compete orders decreased by 4 percent and 3 percent respectively from January. Consumers' engagement with websites, measured by page views per session, product views per session and the average time they spent on sites, fell by 1 percent, 2.5 percent and 4.5 percent respectively from January.

"The online economy is reflecting what is happening in the broader markets," said John Squire, chief strategy officer for Coremetrics. "Consumers are being increasingly selective about when and where they make their online purchases, which means that we can't expect the online sector to power us out of this recession over night. That's why retailers are becoming more analytical about launching marketing programs that aggressively target consumers with personalized, relevant promotions designed to get them to open their wallets."

There was a very thin silver lining in February. On average, the retail sector as a whole reported an increase in average order value and in shopping cart conversion rate of 3.7 percent and 1.5 percent respectively. These numbers show that though the number of people willing to spend online shrank considerably, those who did shop spent more money than in the prior month. Specific segments of the online sector also registered some interesting increases in February, reflecting what can be attributed to a Valentine's Day spike. Compared to January 2009:

--  Gifts retailers and Jewelers -- both traditional winners on
    Valentine's Day -- reported 23 percent and 15 percent increases in order
    sessions respectively. However, the average dollar value of those orders
    did not match these increases, with a modest increase of 4 percent for
    gifts retailers and a decrease of 14.3 percent for jewelers. These numbers
    illustrate that even on those occasions when consumers want to spend, they
    are spending in a more restrained fashion than in the past.
--  Department stores were hit hard by a 13 percent drop in shopping cart
    sessions and a near 10 percent drop in order sessions. However, department
    stores did an excellent job of appealing to a smaller group of consumers,
    reporting increases of 2 percent and 13.4 percent in the average number of
    items per order and their average dollar value.
--  Apparel, Health and Beauty, Home Goods, Outdoor Goods and Specialty
    retailers all reported decreases in order sessions of 12.6 percent, 9.6
    percent, 5.2 percent, 10.8 percent and 7.2 percent respectively.
    

Read the complete Coremetrics February 2009 Benchmark Report in PDF.

Source

These findings are based on data from Coremetrics Benchmark™, the industry's only peer-level benchmarking solution that measures online marketing results, including commerce data, against those of the competition. More than 300 leading U.S. retailers, representing approximately $15 billion in revenues annually, contribute their analytics data to Benchmark. All data is aggregated and anonymized. Abercrombie & Fitch, Alibris, Bloomingdale's, Coldwater Creek, L'OCCITANE, Macy's, PETCO and REI are just a few of the participating companies.

About Coremetrics

Coremetrics is the leading provider of online marketing and business optimization solutions. Its products help businesses increase revenues and find and retain their most profitable customers by maximizing every online interaction. More than 1,500 online brands globally, transacting more than $20 billion this year, use Coremetrics' Software as a Service (SaaS) to optimize their online marketing. Coremetrics' solutions encompass advanced online analytics and integrated precision marketing applications, including search engine bid management, email targeting and cross sell recommendations to acquire customers more cost effectively, increase conversion rates, and increase lifetime customer value. Coremetrics is consistently recognized by industry analysts and thought leaders, and in 2008 was named to Deloitte's Technology Fast 50 Program for Silicon Valley Internet, Media, Entertainment and Communications companies. The company is privately held with funding from 3i, Accel Partners, FTVentures and Highland Capital Partners, and is headquartered in San Mateo, California.

To learn more about Coremetrics, visit http://www.coremetrics.com or call 866-493-2673.

Coremetrics has strongly supported online privacy since its inception. To learn more, visit www.coremetrics.com/privacy.

Contact Information

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    Shelley Risk
    Horn Group for Coremetrics
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