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Ecommerce: Market Trends, Analysis and Observations
What's going on?
TonyMc




msg:3682109
 4:42 am on Jun 24, 2008 (gmt 0)

I generally don't put a lot of faith in threads that generalize either negative or positive but sales have taken a really unusual and dramatic downturn in the last week or so. It's been weird enough that I'm curious what others are seeing. As I say, sales have slowed way down but traffic seems to be near normal. I even got a call from one of my suppliers asking if something was wrong that they should know about. They said that their sales had dropped off pretty dramatically from all of their retailers.

Are others seeing this as well? Is it gas prices, the season or what?

 

King_Fisher




msg:3682124
 5:49 am on Jun 24, 2008 (gmt 0)

All of the above...The reason your traffic is still good is that people are
still looking/shopping but are putting off purchasing untill they are comfortable with the economy...KF

Turbosho




msg:3682382
 1:58 pm on Jun 24, 2008 (gmt 0)

I saw the same thing across all sites, two weeks ago was a bad week, last week was a really bad week. I figure its vactions+gas+economy.

ByronM




msg:3682434
 3:06 pm on Jun 24, 2008 (gmt 0)

It was slow last week for sure, a little burst of orders on Monday but for the first time ever this month will be flat/downward trend. Everyone i know is "buckling down".. shifting focus on selling the wants to the needs as far as electronics go - batteries, replacement components and cheaper "at home" stuff such as games/hobbies and cheap toys.

The land rush over the rebate checks has also essentially dried up.. i think wal-mart cornered that market ;)

8foldpath




msg:3682666
 7:04 pm on Jun 24, 2008 (gmt 0)

Ditto all that guys! (I confirm what your findings) Thanks to this forum, we're all in it together. Cheers! See you guys in more useful threads.

dickbaker




msg:3682770
 10:06 pm on Jun 24, 2008 (gmt 0)

I saw a real burst in sales when the stimulus checks started to arrive. Like others on this thread, though, sales have really tapered off in the last week.

My niche is generally slow in the summer, so it will be interesting to see what happens come September or so.

Fortunately, the manufacturers of some of the products I sell are offering rebates or add-ons to stimulate summer sales.

minnapple




msg:3682774
 10:12 pm on Jun 24, 2008 (gmt 0)

Definitely people are being more careful with their spending. Inpulse buying is down, and they are viewing more sites before finalizing their purchase if they purchase at all.

dibbern2




msg:3682910
 5:00 am on Jun 25, 2008 (gmt 0)

Its not surprising, when you consider the news bombardment day after day: mortgage crisis, gas prices, plant closings, stock market woes, and (lately) flooding taking out the center of the US.

Pretty bleak picture.

xalex




msg:3682945
 7:30 am on Jun 25, 2008 (gmt 0)

I will second that. Last month was one of the highest gross, this month will be the lowest.

But we have seen sales rise on essentials. Which is bad news. That means economy is hurting and lot more people are price hunting.

adfree




msg:3682952
 7:54 am on Jun 25, 2008 (gmt 0)

How bad is it? - Ask the consumer... [money.cnn.com] (CNN Money report today).

Market intelligence suggests that we are all sitting on our wallets right now. Welcome to the club, this one won't go away too quickly...

newviewit




msg:3682972
 8:32 am on Jun 25, 2008 (gmt 0)

Yep slow slow slow for most of my sites... but some niche sites are actually keeping their ground (necessities). It's only going to slow down more in the coming months and could drag on for a long time if you're in the wrong end of the market.

Whitey




msg:3682989
 9:25 am on Jun 25, 2008 (gmt 0)

The above seems US centric, but i believe it's a Worldwide trend, with a few bright spots, maybe like Saudi Arabia ! :

- gas / fuel
- interest rates / mortgages
- home equity lower
- stocks generally lower
- Easter / School Holiday disruption preceeding buying patterns

One thing that puzzles me is that although traffic is generally down [ Check Google Trends for your industry / subject keyword ] conversion rates have retracted further. I would have thought both would have been in line.

trinorthlighting




msg:3683053
 12:39 pm on Jun 25, 2008 (gmt 0)

Our sales have actually been increasing.

saxman




msg:3683063
 12:55 pm on Jun 25, 2008 (gmt 0)

I have noticed the same as most here, but there are exceptions. My business is IT, and we have seen great growth the entire year. The reason for this is becasue people are shopping online more to avoid the ever-increasing gas prices. This bids well for people like me a as we have companies that recognize that they need to do more web advertising, and even companies that have established websites are coming to me for Search Engine Optimization and Google Adwords advice and services. It's been great for business, but the downside is that it an added cost for retailers and with the way the economy is today that cost is then past on to consumers which only fustrates them even more. Times are tough. I still think that we haven't seen the bottom of the barrell yet. The best thing to do is cater to your consumer demographics basic needs and don't worry about the frivolous right now. Stick to your bread and butter and undercut the competition in your area (I know, Thanks Wally World).

Good Luck everyone - Saxman

engine




msg:3683232
 4:22 pm on Jun 25, 2008 (gmt 0)

Former Federal Reserve Chairman Alan Greenspan warned on Tuesday the U.S. economy was on the brink of a recession, with the chances of that happening at more than 50 percent.

Asked if the U.S. economy was in recession, Greenspan said: "We are on the brink."

A quick recovery was unlikely, he said via video link to a conference in Johannesburg. "A rebound at this stage is not something I think is in the immediate outlook," he said.

[reuters.com...]

When you see someone like that make those comments, you tend to have to sit up and listen.

On the positive side, it's 50% chance it'll not.

npwsol




msg:3683262
 4:53 pm on Jun 25, 2008 (gmt 0)

The quick rise in gas prices definitely has something to do with it, considering that shipping prices are very typically offset to the consumer. We're paying an extra buck fifty for every gallon those trucks use (spread out over their entire payload, of course). It's not significant, but as consumers see prices all around rising, they'll panic.

Couple that with the consistent decline in value of the mighty dollar and corporations not adjusting their pay scale to the increasing cost of living, and yes, we have a real problem. Federal Minimum Wage has been increased, but that's still ignoring the fact that the Federal Minimum wasn't enough to live on before this latest spike in prices, and you'd best believe that even with the raise it's still not realistic.

What companies do in the coming months will resoundingly affect what happens to the economy. Americans have slowed down on spending because they are afraid they cannot afford to spend the money (personally I know I can't). Companies that can afford to need to drop their prices and cut costs without cutting jobs.

How about we kill two birds with one stone and increase domestic production? We can start by making our own action figures instead of shipping them in from halfway around the world.

Companies that do so may not be very profitable in the coming quarters, but there is no better way to kickstart the economy.

Call me pessimistic, but that won't happen. The companies that are profitable enough to do this are typically international companies who will be more inclined to increase their profit margin by shifting focus to other markets, exacerbating the situation in the States. Is this to be the fall of our Roman Empire?

December 21st, 2012

300m




msg:3683346
 6:21 pm on Jun 25, 2008 (gmt 0)

I have seen a downturn in the technology sector. However, last month was worse than this month. I have been watching this since January and while i love 20% gains on profit, I am recently happy with a flatline or slightly better.

Gas prices are playing a major role. So is the risk of losing a home because of and ARM.

While I am lucky to be unaffected by the housing market, i am affected by fuel. I have found my self looking at things to buy online and deciding not to purchase. If i am not in bad shape during what i feel is 2 month in to a recession I can only imagine people that have V8 SUV's and ARM loans with a moderate pay scale is much less likely to pay for something that is not a necessity right now.

Also: Our company has seen its growth outside of the US for a little while now.

ddogg




msg:3683382
 7:06 pm on Jun 25, 2008 (gmt 0)

June is usually bad for me, and this June is no exception. This week is terrible so far.

HugeNerd




msg:3683413
 7:34 pm on Jun 25, 2008 (gmt 0)

We do get paid per word for our posts, right?

Okay, okay. Gas prices (more importantly crude oil prices) are rising. Everyone's costs are increasing. Panic in the streets...

IMHO, we (by this I mean Americans) have been underpaying for oil/gas for quite some time. As the largest consumer of petrol, I imagine this deflated the price per barrel on the open market to an artificially low level.
What we have been seeing, then, is an equilibration of supply and demand...to arrive at the actual market value of a barrel of crude oil. Factor in an understanding that we have no clue how much oil is really left/available and cannot, therefore, acurately assess our future supply; we're probably right where we ought to be...paying for the difference between what crude oil should have cost all along and what we have been paying for quite some time.

I would liken this to a balloon payment on a mortgage. We simply deferred payment to keep the economy chugging along. The payment is now due and we do not have, nor have we ever had, a plan, not even a contingency plan, for this reality. Adam Smith's invisible hand is having tangible effects; slapping the unprepared!

A major impetus for my analysis is based upon Dow Chemical, now the largest US chemical company and one of the biggest on earth. Why? This week on Tuesday, June 24, Dow Chemical announced their second major price increase, 25% across the board, in a month -- the first was 20% across the board -- and the inclusion of freight surcharges as well as reduced output. What does this mean? Only that the cost of making plastics just increased by as much as 45% (so if you purchase or use any item involving plastic AT ALL, prepare to pay more). Soon you may have the choice of "Paper or no bag?" at the grocery store.

While the ecommerce sector seems to think we may be somewhat isolated from oil price increases, or even benefit from them, I doubt we shall be shielded.

My honest assessment: Inelastic goods = fine. Elastic goods = many business closures, lay-offs, downsizing, etc. in the short run only. In the long run (next year or two for this exercise), I picture business as usual. Remember, we are talking about a possible recession; unemployment is still rather stable and low in a historic sense; the rate of inflation is not absurd given the dramatic increase in energy costs; and output, productivity and efficiency are still increasing, albeit at decelerated rates. Look for inventory levels to drop and factory floor orders to decrease but don't get too worried: American's don't know how to save money. Most of us will spend 90% of every earned dollar; this isn't a habit we're likely to change just because the sun is behind a cloud. We might be more careful what we spend it on (for a time, anyway), but we'll spend it just the same. Once we get settled into our new budgets it will be business as usual...our societal memory is notoriously short!

You ask: And if we do have a recession?: Shove off with your doom and gloom! A recession means more opportunities for the well positioned and astute. It'll be rough for a bit, but we'll (think "we" as an aggregate, macro economy) simply shed some detritous and return with renewed strength based on necessarily increased efficiency.

My evidence: Have you had friends laid off? Anyone started walking to work because it was the only way to feed their children? Anyone shot Old Yellow to cut costs and make a meal? I live in Chicago and there aren't any more panhandlers or busking on the street corners than there were 6 months ago, let alone 5 years ago. I'll continue to plan for the worst and hope for the best. Smart investments and business plans are smart by design, not by economic trending -- most success stories have little to do with luck.

Currently: Traffic is steady, gross sales are down. I have cut AdWords spending to 50% of last-year-to-date (LYTD). Conversions on what have always been my best selling widgets are up (some days as high as 15%). High-end widgets are converting at usual or increased rates (luxury goods tend to be somewhat immune from recessions as the wealthy still are, well, rich) for the summer. The "window" shoppers have dried up. Strangely, I have had more elderly customers, more sales to businesses, and the call-in orders have spent less time on the phone and appear to be better researched and more educated (quite a few orders shipping to doctors offices or paid for by credit cards registered to Dr. John Doe or Jane Doe, MD., PhD. etc).

:o)

Rugles




msg:3683498
 9:19 pm on Jun 25, 2008 (gmt 0)

Nice first post.

Welcome to the board.

I see today that Warren Buffett is suggesting the US is currently in a recession. I tend to believe him. Not to get political, but the powers that be, can monkey with the numbers a little bit.

This will be the first major economic downturn that that ecommerce will encounter. So it will be interesting to see if people turn to the internet for shopping to cut the cost of actual physical shopping. Or, internet shopping is the first thing the consumer cuts out. Because lets face it, a certain amount of internet shopping is indeed impulse shopping.

minorleague




msg:3683506
 9:27 pm on Jun 25, 2008 (gmt 0)

Last two weeks noticed an uptick. Maybe reality is setting in.

aleksl




msg:3683602
 12:44 am on Jun 26, 2008 (gmt 0)

This will be the first major economic downturn that that ecommerce will encounter.

not true. One was between 2000 and 2001 when we saw a lot of dot Bombs explode.

That is, until "genius" Greenspan found another way to hide huge running debt+inflation and redirected it from stock market (during Clinton) to housing. Luckily, "genius" retired before a bubble he and his private cartel Fed buddies burst into poor- and middle class man's face. So here we are, enjoying it.

We'll see much worse before we see anything remotely better. There's so much s!@#$ hit the fan this time you can't even see the walls were white once.

Oh, yeah...ecommerce...going ok I guess, 2 weeks before major holiday always little slow for us.

jsinger




msg:3683612
 1:07 am on Jun 26, 2008 (gmt 0)

Online business was terrible after 911 for a few months. If you've never seen a sales downturn then you're probably new to ecommerce.

-----
Our traffic has been weak for months but conversion rate has been very good.

Doubt flooding in the Midwest --where we are-- is much of a factor. There are benefits too. Rain is keeping people indoors on their computers rather than outside doing the usual springtime stuff.

pdivi




msg:3683624
 1:22 am on Jun 26, 2008 (gmt 0)

Both in terms of traffic and sales, we had an amazing Jan/Feb, slow erosion March/April/May, then off a cliff in June. We are 90% US. US consumers are just clamping down. Their basic (food & energy) expenses are way up, their real estate & stock assets are way down, and who knows whether their jobs will be in peril soon. Clamping down is just a sign of sanity.

I don't expect our market to bounce back any time soon. My only hope is that some of my competitors will be have a harder time weathering it than I.

engine




msg:3684048
 1:52 pm on Jun 26, 2008 (gmt 0)

The economy grew slightly faster than initially thought in the first quarter, while the job market remained sluggish last week, according to U.S. data released on Thursday.

Gross domestic product, which measures total output of goods and services within U.S. borders, grew at a 1 percent annual pace in the first three months of 2008, matching economists' forecasts and a touch stronger than the 0.9 percent growth estimated by the Commerce Department last month.

The figure was initially reported in April at an anemic 0.6 percent, fueling concerns that the U.S. economy may be slipping into recession. However, those concerns have subsided as fresh data showed healthier growth, particularly in consumer spending and exports.

GDP Growth Revised Up [reuters.com]

That's still a pretty measly growth rate, but, at least it's on an upward trend.

HugeNerd




msg:3684057
 2:04 pm on Jun 26, 2008 (gmt 0)

Some food for thought relating to GDP: There is discussion amongst economists of adding a "happiness" variable to create a Gross National Happiness (GNH) index. I believe it is intended to capture life expectancy, some sort of ecological/environmental factors, and retool the wages/income variables to reflect a "keeping up with the Jones" psyche. No joke. Bhutan already does it. I'll try and find a suitable article on this.
The road block with this index is finding constantly measureable and objective variables.

Think the GNH of the US would be very high right now?

Rugles




msg:3684158
 3:27 pm on Jun 26, 2008 (gmt 0)

Online business was terrible after 911 for a few months. If you've never seen a sales downturn then you're probably new to ecommerce.

Not new at all. We had growth during the post 911 downturn, and really impressive growth too. Plus Canada (where I am based) did not have negative growth at the time, we missed the "recession" completely.

My point about this being the first economic downturn was because the post 9-11 downturn was very short. Only a few months of economic negative growth. The massive spending increase by the US government and the dramatic rate cut by the Fed made the downturn very short lived.

This particular economic downturn started last year. We still have not hit bottom. Typically the effects of a recession last at least a few years. The post 9-11 downturn was only several months.

I will stand by my statement that this is the first serious negative economic period during the ecommerce age.

T_Miller




msg:3684290
 5:15 pm on Jun 26, 2008 (gmt 0)

We've been having a great year overall (B&M/Web/eBay).
BUT, June was our best month last year. This June we're off about 30% compared to last year.

Still up 20% for the year, but someone put the brakes on about June 1st. Our widget's industry generally weathers tight economies, but by May we started seeing growth slowing. June has been dead. July is always dead for us, so we're just tightening our belts and keep plugging away at growing our website.

B&M is up, and more local customers are using the website to order & pickup at the store.

Website continues to grow, thanks to my constant work.

Our eBay sales, once a large part of our business, has twindled. That is eBay's fault, the more they screw the platform up for good sellers (We're a PowerSeller with 100% FeedBack) the less effort we put towards it.

Tourz




msg:3684330
 5:57 pm on Jun 26, 2008 (gmt 0)

There's no shortage of people with money in the world -- and more and more people are using the internet. That's my perspective, anyway.

May was slow but I think that was my fault.

jsinger




msg:3684393
 6:48 pm on Jun 26, 2008 (gmt 0)

Here's an amazing fact I saw yesterday which has nothing to do with ecommerce or even B/M commerce:

"A full years tuition to Harvard in 1958 cost $1,250" (no room and board)

GULP!

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