ComScore: E-Retail Sales Down, Holiday Ad Budgets Should Steady

For the second straight quarter, retail e-commerce sales dropped compared to the year before, according to comScore. Sales totaled $29.6 billion for the quarter compared to roughly $30 billion last year, a 2 percent decline. It’s the first time online retail spending has dipped for two consecutive quarters, as sales were down by 1 percent in Q2.

Interestingly, the “Cash for Clunkers” program may have been partly responsible for the fall-off. When the program was running at full tilt in July and August, comScore spokesman Andrew Lipsman explained, retail e-commerce was noticeably worse compared to September.

“When the ‘Cash for Clunkers’ program was initiating spending for major purchases…that’s almost inherently going to take away from other discretionary purchases,” he said. “If you spend a lot on one thing, you are going to spend less elsewhere. We think that pulled away from the online channel. That said, even without that particular development, we are still at best flat or slightly negative [for Q3].”

But Lipsman said his company doesn’t expect that statistical trend to continue, suggesting that last year’s dismal holidays set up a 2009 Q4 that should look better comparatively. And he seemingly warned against the idea of marketers shrinking their e-commerce advertising budgets for the holidays due to the last two quarters.

“If you are trying to figure out which channel to allocate budget, the online channel is still significantly a higher-growth channel,” Lipsman said. “And dollars that you spend online drive both online and offline sales.”

Meanwhile, the retail e-commerce sector has not experienced growth since Q3 2008, as last year’s Q4 was down and the first three months of this year were flat, according to comScore. The research firm also strongly advised e-retailers to utilize free shipping offers like never before this holiday season.