After stagnating for much of 2009, online retail spending continues to rebound in 2010, even as overall consumer confidence remains relatively stable.
According to new data from research firm comScore, online retail spending in the third quarter of 2010 rose 9% year over year. That’s the fourth straight quarter of year-over-year spending growth, an increase that comes after online spending struggled mightily for much of 2009 according to data gathered by the firm.
Still, the spike in online spending should not be taken as proof of an impending economic recovery. Consumer spending stalled last month according to figures just released by the Bureau of Economic Analysis, and overall year-over-year consumer spending has increased just 1.2%. The conflicting metrics suggest that the increase in online retail spending is more a function of changing shopping habits than rebounding consumer confidence. In other words, Americans aren’t shopping more, they’re just doing more of their shopping from home.
Indeed, comScore chairman Gian Fulgoni struck a restrained tone in a release announcing the findings. “We continue to preach caution due to the continuation of high unemployment, which is creating very divergent spending patterns between the ‘haves’ and the ‘have nots,’” he said. “Even Americans who do have jobs still aren't confident enough to spend freely and many are still pained by their loss of wealth since the financial crisis struck in 2008.”
Other analysis suggests that a bump in online shopping isn’t likely to be reflected by a large overall spending increase. Last month, the National Retail Federation reported that online retailers expected to see holiday sales increase by 15% over last year – even as another survey by the organization found consumers expecting to increase their holiday spending by just 1%.
—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.