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CUSTOMER RELATIONSHIP MANAGEMENT NEWS. UPDATED 13 MINUTES AGO.
You are here: Home / Business Briefing / E-Commerce Shines in Holiday Sales
E-Commerce Shines in Holiday Sales
E-Commerce Shines in Holiday Sales
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
DECEMBER
26
2007
Shoppers were spending money up until the last minute, but holiday sales were nevertheless a disappointment. So says MasterCard Advisors' SpendingPulse, a report that tracks retail sales nationally.

SpendingPulse analyzed the electronics, apparel, e-commerce, and luxury sectors. All categories experienced a surge in growth on Black Friday, a lag in the middle of the holiday season, and a rally to the finish line. MasterCard's report indicates that retail posted year-over-year growth of just 3.6 percent for the period between Black Friday and December 24.

"Overall, sales came in just above the lower end of the range we were expecting, maintaining the slower, modest growth we have been seeing throughout the year," Michael McNamara, vice president of research and analysis for MasterCard Advisors, said in a statement.

"Most industry observers had adjusted their sights down," he went on to say, "but anyone who was looking for this holiday season to kick-start a new wave of growth would find these numbers falling short of expectation."

Electronics Surging

Even so, electronics sales opened the season with a surge of 15 percent growth on Black Friday. By the middle of the season, however, consumer spending on electronics was showing only a 5.8 percent gain over the same period in 2006. By the end of the season, overall growth was a moderate 2.7 percent.

A noteworthy observation, however, is that SpendingPulse views the electronics sector as encompassing a product mix of large appliances as well as consumer electronics, such as cameras, televisions, and software and hardware for gaming.

"It's very likely that when you extract big appliances, that the consumer electronics sector provided a higher level of growth than we see in our view of this category," McNamara said.

E-commerce the Strongest

E-commerce was the strongest category, easily outperforming all other categories covered by the SpendingPulse report. This channel enjoyed a strong start to the holiday shopping season, posting growth in the 30 percent range on Black Friday. On Monday, November 26, online sales grew at 40 percent.

December 4 was the first of a series of record-breaking days, followed by December 11, 12, and 13. In fact, December 13 qualified as the biggest single daily volume of sales, according to the report. The season finished showing an overall year-over-year growth rate of 22.4 percent.

The luxury category was strong as well. This category encompasses high-end department stores, apparel, leather goods, and restaurants. Luxury goods without jewelry included posted a 7.1 percent rate of growth over 2006, tempering its midseason gain of 10.8 percent. "We see this as a strong continuation of a trend we have reported throughout the year in the luxury sector," McNamara said.

Gas and Weather Influences

Gasoline prices during the 2007 holiday shopping period ranged between 30 percent and 35 percent higher than the same period in 2006. SpendingPulse data suggests that the high cost of gasoline could have eaten into other spending, while severe weather in many regions of the country, coupled with high gasoline prices, could have helped energize e-commerce.

"Disruptive weather events can potentially prevent consumers reaching brick-and-mortar locations, and particularly as many of these storms fell between Thursday and the weekend, there's a strong likelihood that purchasing activity was tempered because of them," McNamara said.

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