by Lisa M. Goldberg, eBuying Jo, November 15, 2011
While America’s massive consumer debt issues may bring forth perennial debates about the health of our consumer economy, there is little doubt about the impact of consumers on the economy: U.S. consumer spending makes up a staggering 90 percent of the nation’s GDP, dwarfing the consumer spending made by the government sector of the economy.
Consumers hold a large percentage of our economic power and one of the hardest-hit sectors of the economic recovery in recent years have been retail.
There have been numerous reasons for retailers to fall off as consumer sentiment has dropped, leading to potential consumers delaying spending on non-essential items and watching their budgets closely. Online purchases have also taken off over the last few years, competing with traditional retailers and pinching profitability.
By turning to cutting-edge e-commerce sites to find sales and saving money, shoppers can not only get a great deal on a big-ticket item, but also avoid waiting in long lines on the day after Christmas or waiting to the holiday season for a Christmas tree to be harvested from the mountains of South Dakota.
E-commerce also plays a crucial role in the revenue growth of high-tech businesses such as Amazon.com, Google, and Apple, although some businesses are already benefitting from e-commerce websites. Online brands such as The Home Depot and Target are experiencing double-digit revenue growth.
According to analysts from Forrester Research, 55 percent of the world’s online population shops online. Indeed, while the majority of online shoppers in the U.S. pay with credit cards, total global online shopping from credit cards continues to fall. Credit card transactions are currently an estimated $1.6 trillion.
Since 2008, online shopping in the U.S. has plateaued for the second time in eight years. Experts think the commercial activities of a large number of global consumers have really taken off, making us sit on the sidelines while their online activities are gaining momentum.
The next five years will likely be an exciting time for online retailers and shoppers alike as they strive to compete for the dollars of buyers around the world.
Lisa M. Goldberg is the CEO of eBuying.com, a leading general merchandise e-commerce site. She spent more than 20 years in corporate finance and stock market sales before setting up her own e-commerce company. She has deep insight into how the markets operate, and her experience with web-based companies and online sales allows her to look into new possibilities, identify trends, and generate ideas for new lines of business.