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Is the recession in the USA going to help or hurt the internet?

What will happen?

     
3:46 pm on Apr 7, 2008 (gmt 0)

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When people are faced with a tight wallet and high gas prices will they start to use the internet more often and actually cause internet purchases to increase in 2008?
3:56 pm on Apr 7, 2008 (gmt 0)

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dunno.. i find more people calling me up asking for a better deal on the phone or a coupon nowadays even though our prices are often 10-15% lower than store prices even after shipping in many cases.
7:03 pm on Apr 7, 2008 (gmt 0)

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I think on line traffic will increase and people who haven't used the net

before will start to explore its advantages...KF

7:28 pm on Apr 7, 2008 (gmt 0)

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let me clarify my post.. hehe while sales may increase online by people not wanting to drive i believe the margins will get slimmer and slimmer because of the expectations that is not only has to be faster/easier & more convenient but cheaper.

Funny how people would rather spend 20 minutes in there car, drive to a store, wait in line, checkout, get harassed by security, drive another 20 minutes home than point, click and save and get it in the mail :)

8:24 pm on Apr 7, 2008 (gmt 0)

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Considering this is a "credit crisis" and since "credit" and all it's cards are the backbone of all e-commerce , i would say this particular crunch will not be so kind to us e-merchants...
8:39 pm on Apr 7, 2008 (gmt 0)

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Do you sell something they need, or something they want?

People buy things they want based on emotion, so they will become fearful and stop buying everywhere for this type of thing when money gets tight. For things you need, like for example car parts or groceries, they may look for cheaper deals.

Just remember not to market those things people want as something they need.

9:04 pm on Apr 7, 2008 (gmt 0)

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Funny how people would rather spend 20 minutes in there car, drive to a store, wait in line, checkout, get harassed by security, drive another 20 minutes home than point, click and save and get it in the mail :)

True, but a lot of those people want (or possible NEED) the item *right now* instead of waiting 2-3 days (or longer) to have it shipped to them.

Most of the time, I prefer to save the money and buy online. Plus I get to enjoy the anticipation of waiting for it to arrive. :)

[edited by: LifeinAsia at 9:21 pm (utc) on April 7, 2008]

9:58 pm on Apr 7, 2008 (gmt 0)

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If you have a solid niche, I think that an internet business can still grow and be prosperous through a recession.
10:18 pm on Apr 7, 2008 (gmt 0)

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Officially there is not a recession in USA.
1:17 pm on Apr 8, 2008 (gmt 0)

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I just heard on the radio news today:

" experts estimate that internet spending will increase over 17% because people pay more for food and gas nowadays"

maybe there is hope :-)

2:13 pm on Apr 8, 2008 (gmt 0)

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" experts estimate that internet spending will increase over 17% because people pay more for food and gas nowadays"

maybe there is hope :-)

True, but a month later it will be:

" experts estimate that while internet spending has increased etailers are having a hard time staying in business because of rising energy and fuel costs and the belt tightening of capital and credit markets"

I don't think ecommerce will be immune to exploding energy costs especially when you figure in the exploding costs of doing business

4:51 pm on Apr 8, 2008 (gmt 0)

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That 17% growth quote came from those same "experts" whose brain-dead projections in the late 90s drove web stocks to the moon and led to the dot com crash in 2000.

E-commerce shares have fallen hard in the past 6 months. (and rebounded a bit lately).

I didn't believe the experts then (and bought no dot com stocks); I don't believe them now.

4:57 pm on Apr 8, 2008 (gmt 0)

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"Internet companies" (which is a vaguely defined concept in itself) will be just like other companies. If they have a product or service that people will continue to need, they should be okay. If they know how to be lean and mean, they should be okay. If they use the situation to look into other opportunities a recession creates, they should do well.

If they have a product or service that is very preice conscious, they're going to be in trouble. If they are used to spending wads of cash like drunken sailors, they're going to be in trouble. If they continue to beat a dead horse on a sinking ship instead of moving on, they're going to be in trouble.

4:20 pm on Apr 9, 2008 (gmt 0)

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This is true, the term "Internet" in it self has become vague.
The internet is really just the connection.
I still do experience, when we tell people that we market a large share of our products on the Internet, that they automatically think we sell on Ebay, which bugs the #### out of me.

The economy in the USA is a bit unpredictable these days, when we had a recession in the 70's it was a bit hard to recover.
But now it seems like we seem to figure out how to profit and restructure if necessary any given state and any negative growth is quickly reversed.
Being global can also be a good thing, we did have a short period where we couldn't give away our products in the USA but yet we're swamped from orders around the globe.

3:19 pm on Apr 13, 2008 (gmt 0)

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Not sure about everyone else be we saw a huge drop in sales over the last 10 days. Same amount of traffic but almost no sales.

Cal

7:00 pm on Apr 13, 2008 (gmt 0)

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We're in the same boat ModernM, but it's expected during tax time. Just wait until people get their rebates. :)
8:18 pm on Apr 13, 2008 (gmt 0)

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When people are faced with a tight wallet and high gas prices

When you say high gas prices - can you explain that a little ie prices etc?

6:00 am on Apr 14, 2008 (gmt 0)

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We have had gas prices stay within the $1 to $2 per gallon market from the early 80's until it broke the pivot line a few years back. Since then fuel has climbed its way to over $4 a gallon.

This has had an effect on free cash in the US wallet. Rather then the free cash going to a local business for goods, it's being sent to the oil companies.

My comment of the "High Gas Prices" would relate to purchasing on the internet due to less spending money plus the increased cost of travel to the store(s).

7:07 am on Apr 14, 2008 (gmt 0)

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This has had an effect on free cash in the US wallet. Rather then the free cash going to a local business for goods, it's being sent to the oil companies

That extra dime or two is actually pretty small from an individuals point of view. Is it really the price people gripe about, or is it the irritation that it keeps getting raised little by little, becoming like a symbol of higher prices.

7:28 am on Apr 14, 2008 (gmt 0)

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It will be hurted
4:00 pm on Apr 14, 2008 (gmt 0)

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That extra dime or two is actually pretty small from an individuals point of view.

It's not an extra dime or two- it's several dimes per gallon, meaning several dollars for every tankful. For people who need to fill up several times/week, that adds up quickly- we can be talking several hundred dollars/month, which translates to well over $1000/year (and a lot more for some people). That's the direct cost.

Indirectly, just about EVERY item purchased has increased gas prices factores into their prices, further chipping away at a person'd wallet. Any item you buy has transportation costs associated with it just to get them to the store. Additionally, farm products require oil-based products for their creation (diesel gas for trac)tors, pesticides, etc.).

[edited by: LifeinAsia at 4:01 pm (utc) on April 14, 2008]

5:14 pm on Apr 14, 2008 (gmt 0)

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Wouldn't you say though that unlike other items gas has not followed inflation during those 80 years? If anything I would say it is just catching up. Not to say it doesn't effect the economy, but it also shouldn't be something that can't be dealt with.

Cal

5:20 pm on Apr 14, 2008 (gmt 0)

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We do have a short term vitamin that most people have not mentioned are that don't seem to know about.
Most americans are about to receive a Stimulus Payment of anywhere from $600 per single taxpayer with an extra $300 for each dependent.
Payments are to be released starting May 2 2008 through the end of July.
Not a whole lot of money, but enough to stimulate things a bit and perhaps relief the stress of those living paycheck to paycheck.
All in all in might be just what the USA needs to pull out of an official recession and keep things flowing until next Xmas...
6:18 pm on Apr 14, 2008 (gmt 0)

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Most people have already said they plan to use the payments to pay down debt or put into their investment accounts. So the immediate affect on the economy will probably be less than the politicians had hoped.

Personally, I worry that it may just make things worse with paycheck-to-paycheck people going out and buying $2000 TVs with their $600 check + a credit card.

6:45 pm on Apr 14, 2008 (gmt 0)

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Nietzsche: That which does not kill us makes us stronger.

DBCooper: Credit cards seem to be killing everybody.

7:42 pm on Apr 14, 2008 (gmt 0)

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I know my "stimulus" is going right to Amex and Citi Bank. Doing everything i can to pay off debt.

Thats WHERE it should go but i can always hope people will shop with it as well ;)

8:49 pm on Apr 15, 2008 (gmt 0)

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The stimulus will certainly help :)

While mine is going into savings... I know that most of my friends already know exactly how they'd like to spend their stimulus check - and it isn't to pay off bills or credit cards!

3:28 pm on Apr 16, 2008 (gmt 0)

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If this money pours into banks maybe they'll have money to lend again.