When I draw a chart, I start with a hypothesis. In studying online shopping’s relationship to our shaky economy — from high oil prices to the housing crisis and talks of recession — I expected that a chart of visits to online retailers would show a precipitous decline. According to the latest Reuters/University of Michigan Consumer Index, consumer confidence has reached the lowest level in 28 years.
Yet the facts show that my hypothesis is completely wrong: Visits to online shopping sites are up compared to the previous year. Perhaps the increase could be explained by consumer price sensitivity. In the same University of Michigan Consumer Index report, consumers expect an inflation rate of 5.6% over the next 12 months. Here’s a new hypothesis: when economic times get tough, online shopping sites become an important tool to help consumers find the best price on potential purchases.
The Hitwise Retail 100 Index (a collection of the top online retail Websites) reveals that visits to the collection increased 10.1% from the same period in 2007 to now and over 16.4% from 2006. Examining retail — from electronics to apparel and books to music, the category growing the fastest is sites that help us compare prices across multiple shopping sites. Online comparison shopping engines such as Shopzilla, Shopping.com and Pricegrabber, have, as a category, increased at a rate of 59.9% over the previous year.
