About Hitwise

Hitwise is the leader in online competitive intelligence. Contact Hitwise to maximize your online marketing programs.

Hitwise Intelligence - Bill Tancer - North America

Analyst Weblog

« More on Gas Prices | Tax Season Comes Early Online »

Do Increased Gas Prices = Growth in Online Shopping?

January 15, 2006

In October, I posted a chart in response to Bob Tedeschi's article in the New York Times that put forth the hypothesis that sharp increases in gas prices late last year would lead to an increase in online spending (the underlying assumption being that Internet users would find it more economical to shop online versus burning gas driving to the mall).

After my last two posts that juxtapose retail gas prices with searches for "hybrid vehicles" and "gas prices," I had several requests to re-examine the Tedeschi hypothesis. Below is an illuminating chart. The orange line is 2004 visits to the online retailer index, the blue line is visits to the 2005 online retailer index, and the dotted line is mean U.S. retail gas prices in 2005.

gas prices online retail.JPG

While not definitive, what I believe this chart is showing us, is that rising gas prices led to decreased visits to online retailers. Notice that during and immediately following the spike in prices in September, visits to online retailers dropped below 2004 levels. It wasn't until mean retail gas prices fell below $1.50 per gallon that visits to online retailers grew in comparison to 2004. Here's my hypothesis: sharply rising gas prices lead to 1) reduced consumer spending due to economic concerns and 2) decreased online and offline consumer spending as a result of reduced disposable cash.

Posted by Bill Tancer at 06:58 PM | (0) | (0)