Online Retail Traffic Slows - InformationWeek

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10/29/2008
12:56 PM
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Online Retail Traffic Slows

The eight-week decline is the first drop in retail traffic since June 2007, according to Hitwise, which attributed the losses to increased financial concerns.

Online retail traffic has decreased for the eighth week in a row, according to a recent report. Hitwise announced Tuesday that U.S. visits to its index of 500 retail Web sites dropped 3% during the week ending Oct. 25, compared to the same week in 2007. Online retail also lost ground in terms of its share of overall Internet traffic, declining from this time last year, when it represented 3% of all U.S. visits, to 2.92% last week.

"These declines have strong implications for the upcoming online holiday season as well as offline sales," Heather Dougherty, research director at Hitwise, said. "Everyone is aware of the role that the Internet plays to influence offline sales through research, so this slowdown may indicate a further ripple effect in sales in retail locations."

The eight-week decline is the first drop in retail traffic since June 2007, according to Hitwise, which attributed the losses to decreased consumer spending because of increasing financial concerns.

From June through August, U.S. visits to Hitwise's Retail 500 Index rose 14% compared to the same period last year. In September, visits declined by 4%.

Music, computers, and event tickets appear to be among the hardest-hit online retail categories. U.S. visits to music retail sites dropped by 21%, while visits to computer retailers decreased by 18%, compared to last year, according to Hitwise. Visits to sites selling event tickets declined b 15%, while traffic to sites that sell toys, hobby supplies, video, and games decreased by 10%.

Hitwise reported a few bright spots. Traffic to health and beauty, grocery and alcohol, and home and garden categories experienced the strongest year-over-year growth.

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