comScore Finds Small Firms Losing Online Market Share

5.6 percent YOY decline recorded in Q2

Before diving in, we should note that the second quarter of this year is well over, and last week, the Dow was way up.  That said, a new report from Hitwise covering the second quarter of this year indicates that things went pretty wrong for small businesses.

Gian Fulgoni, the executive chairman and cofounder of comScore, wrote on the comScore Voices Blog, “In a blog post earlier this year, I wrote about the challenges facing small e-commerce businesses, noting that their share of online spending in Q4 2009 showed a 4.2 point decline versus Q4 2008.  Unfortunately, the situation hasn’t improved since then.  In fact, it’s gotten worse.”

Small businesses actually suffered a 5.6 percent year-over-year decline in the second quarter, according to Fulgoni.  And the below tables illustrate his point.

Later, Fulgoni added, “The market share loss suffered by the smaller retailers corresponds to an absolute sales decline of about 6%.”

Let’s hope things have gotten a lot better since then.

Anyway, Fulgoni did end his blog post with a push for policies that favor small businesses, and perhaps his position will help catch the attention of someone even more important.

Take Advantage of E-Commerce Spending Growth

Spending Up 10% From Last Year According to Research

comScore recently released its Q1 2010 U.S. retail e-commerce sales estimates. The firm found that online retail spending neared $34 billion for the quarter, a 10 percent increase compared to last year.

Are you finding new ways to reach customers online? Comment here.

This is the first time growth rates actually reached double-digits since the second quarter of 2008, according to comScore. Take a look at this table of growth rates:

“The first quarter returned the U.S. retail e-commerce market to healthy double-digit growth rates,” says comScore chairman Gian Fulgoni. “While these spending gains provide reason for optimism, we should note that upper-income households are currently shouldering much of the growth. Should the economy falter in the second half of the year and upper-income consumers return to a savings mode, we could still see growth decelerate. But for the time being, this momentum is encouraging.”

Other highlights among comScore’s findings include:

- Growth in the first quarter was predominantly driven by upper-income consumers, with spending among the $100,000+ household income segment up 14 percent.

- Pureplay (online-only) retailers continued to gain e-commerce spending market share from multichannel retailers.

- Larger online retailers continued to generate higher growth rates than smaller retailers, but the smaller retailers are finally beginning to see positive growth once again.

Businesses have more ways than ever to reach consumers online to increase sales, and this only appears to be increasing. Just yesterday Amazon, for example, launched its new WebStore e-commerce product, which lets businesses take advantage of the Amazon platform and design sites around it, while minimizing the Amazon branding itself, but utilizing its trusted checkout process.

Of course Facebook is looking to play an increasingly great role in online shopping. There are already numerous apps catering to this, and Facebook itself is closing in on 500 million users.

Take Advantage of E-Commerce Spending Growth

Spending Up 10% From Last Year According to Research

comScore recently released its Q1 2010 U.S. retail e-commerce sales estimates. The firm found that online retail spending neared $34 billion for the quarter, a 10 percent increase compared to last year.

Are you finding new ways to reach customers online? Comment here.

This is the first time growth rates actually reached double-digits since the second quarter of 2008, according to comScore. Take a look at this table of growth rates:

“The first quarter returned the U.S. retail e-commerce market to healthy double-digit growth rates,” says comScore chairman Gian Fulgoni. “While these spending gains provide reason for optimism, we should note that upper-income households are currently shouldering much of the growth. Should the economy falter in the second half of the year and upper-income consumers return to a savings mode, we could still see growth decelerate. But for the time being, this momentum is encouraging.”

Other highlights among comScore’s findings include:

- Growth in the first quarter was predominantly driven by upper-income consumers, with spending among the $100,000+ household income segment up 14 percent.

- Larger online retailers continued to generate higher growth rates than smaller retailers, but the smaller retailers are finally beginning to see positive growth once again.

Businesses have more ways than ever to reach consumers online to increase sales, and this only appears to be increasing. Just yesterday Amazon, for example, launched its new WebStore e-commerce product, which lets businesses take advantage of the Amazon platform and design sites around it, while minimizing the Amazon branding itself, but utilizing its trusted checkout process.

Of course Facebook is looking to play an increasingly great role in online shopping. There are already numerous apps catering to this, and Facebook itself is closing in on 500 million users.

How Can Marketers Be More Effective?

comScore’s Eli Goodman offers advice

Many marketers are finding themselves in a difficult situation. They are trying to meet the same goals that they were given before the recession hit, but now they have smaller teams and budgets to work with. So, what can marketers do to succeed?

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While there is no easy solution to this predicament, there are some strategies marketers can implement that will help them be more effective during these times. As Eli Goodman of comScore says in the above video, marketers have to take a balanced approach to decision-making. In other words, marketers should not base all decisions on data or on their “gut feeling.”

“It’s finding a happy medium between the two and challenging yourself as a marketer,” says Goodman.

He also points out that every company is different. One company might need to pay closer attention to the data, while another company should rely more on the “gut feeling.” A combination of the two, however, is a good rule-of-thumb to follow.

In addition, marketers need to communicate with other departments as well as the other marketing divisions within the business. This lack of communication is a growing trend in businesses and can results in serious harm.

Goodman offers this suggestion: “Put it all together under the same umbrella and then start to figure out maybe where you’re doubling up.”

If marketers apply this advice, they can find areas in which they can be more efficient.

So, in spite of the economic turmoil, it is possible for marketers to be effective, but it does take hard work.

Do you have any tips for being an effective marketer during these times?