The Great Debate UK

Is Ecommerce losing its immunity to economy woes?


Eric Auchard is a Reuters columnists. The opinions expressed in this column are his own.

For years, Web retailers have touted their convenience and efficency over conventional retailers, and enjoyed surging double-digit sales growth, especially in the crucial year-end holiday shopping season.    But the steady draining of consumer confidence reflected in recent government data and the latest market research reports suggest the online retail industry is bracing for a humbling first-ever year of flat or even contracting holiday sales.

Ecommerce, for reasons tied to both the global economic crash and Web-specific factors, is poised to fall harder than the much maligned retail store industry, itself struggling with recent high-profile bankruptcies and widespread signs that consumers are looking to sharply curtail their spending.

“Retail spending has not really dropped,” says Gian Fulgoni, chairman of consumer audience measurement firm comScore Inc. “It’s ecommerce growth rates that have fallen off a cliff.”