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Hitwise Intelligence - Heather Dougherty - North America

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Which product categories can weather the economic storm

October 23, 2008

Last week I wrote about the decline in visits to the websites of the top 500 retailers (ranked by traffic), a trend that continued for the week ending October 18, 2008 with a 5% year-over-year decline. This was the seventh consecutive week that retail traffic was down, the first weeks with a downturn in traffic since June 30, 2007.

Retail 500 YoY Changes 10-18.png

Last week, the product categories impacted the most from year-over-year traffic declines were Computers, Ticketing, and Office Supplies. Perennial holiday favorites like Toys & Hobbies, Music, Video & Games, and Appliances & Electronics are also experiencing decreased traffic – which may just be a temporary lull as consumers hold off & save for the upcoming gift purchases.

The more necessity-driven categories such as Grocery & Alcohol and Health & Beauty (includes drugstores) are receiving more traffic than the same timeframe last year. Consumers are cooking more at home, thus seeking out coupons & weekly specials from the websites of local grocers to save on food costs. While Health & Beauty may not immediately seem necessity-driven, both drugstores and websites that sell products promoting a healthy lifestyle are also increasing in traffic. House & Garden is another category that has maintained levels of traffic from increased interest in home improvement, especially energy-saving products (e.g. wood stoves, solar panels, fireplace accessories) that can help reduce upcoming heating bills this winter.

product categories.png

As we head into the holidays, we are all waiting to see how consumers will react to the economy in terms of spending. So far, we see higher growth rates projected for the online sales during the holidays (but lower than in years past) as compared to the offline sales projections, but the Internet represents a smaller share of the total retail sales.

I'll be curious to see how retail traffic looks once the election is over to monitor how much attention was moved away from shopping towards politics and how also much has shifted towards the economy (& less spending).

Posted by Heather Dougherty at 04:48 PM | (0) | (0)
In Categories Economy | Retail