The release of fourth quarter and annual e-commerce sales has come to be a cause for celebration and optimism among “e-tailers” but this year’s Q4 and full-year 2008 tallies are proving to be a bit sobering. Though individual e-commerce businesses, such as Amazon, posted strong holiday and full-year revenues, the industry as a whole suffered as a result of the financial crisis and spreading recession.
E-commerce sales have grown continuously year over year since, well, since e-commerce moved into the mainstream in the mid- to late 1990s. Though the annual trend continued in 2008, Q4 ’08 e-tail sales declined 3% as compared to Q4 2007, digital media metrics company comScore reported today. The quarter over previous year’s quarterly decline was the first negative growth rate for e-commerce sales comScore’s recorded since it began tracking it in 2001. On the upside, 2008’s full year e-tail sales rose 6% to $130.1 billion, though even this figure is markedly lower than previous years’ growth rates, according to comScore.
ComScore’s been recording quarterly growth rates around 20% throughout 2007. The statistic began to decelerate in the first quarter of 2008 and turned negative in Q4. Video games, consoles and accessories remains atop the list of e-tail sales’ best performers (ex-travel), increasing 29% year-to-year. Online sales in the ‘home, garden and furniture’, and ‘sports and fitness’ categories also posted strong growth rates. Both were up 25% year-to-year.
Consumer electronics and ‘apparel and accessories’, two of the largest e-tail market segments, also posted gains-9% and 4% respectively. ‘Music, movies and video’ posted the worst annual percentage decline, falling 23%. Computer software, excluding games, was the second-worst performing category, dropping 18%.
“The fourth quarter rounded out what was a particularly challenging year for online retailers,” comScore chairman Gian Fulgoni stated in a media release. “The financial market meltdown that began in the fall dramatically reduced consumers’ discretionary spending power, resulting in the first quarter of negative growth that we’ve observed. As we enter 2009 with rising unemployment and continued economic uncertainty, the first few months of the year will be especially critical in foretelling what 2009 has in store for the online retail sector.”