Sales Rebound Expected in 2010

Economy shows signs of recovery, and people are ready to spend.

by staff writer
- Aug 07, 2009

Despite a recent drop in consumer confidence, sales are expected to pick up in the coming months as the economy begins to recover.

Key economic indicators suggest that the recession is beginning to pass and people are ready to spend, although a full recovery will take time, officials note. According to WSL Strategic Retail, a consumer behavior research firm, one in four women are ready to buy new outfits, spend on a vacation or purchase items for their homes. The stock market is also getting stronger and the housing market is improving—which, analysts say, should give consumers more confidence.

Online sales should rebound next year, reports researcher eMarketer. Spending should be back on course by 2011.

"There's a lot of information that supports the idea that we've turned a corner," notes Jim Paulsen of Wells Capital Management in a USA Today article.

While people have had to scrimp on luxuries, that doesn't mean they want to penny-pinch forever. In fact, consumers are already spending heavily on virtual goods and are expected to spend $42 million on virtual gifts for their "friends" on Facebook by the end of the year.

Online sales should rebound next year. Spending should be back on course by 2011

eMarketer predicts that online sales will reach $132 billion by the end of the year. Though this number is lower than it was at the end of 2008, the drop is just 0.4 percent, eMarketer reports.

The Conference Board, a nonprofit global business organization that tracks the business world, says "the recession will continue to ease."

Yet people remain apprehensive about the future. Consumer confidence dropped from 54.8 points in May to 49.3 in June and to 46.6 in July. Confidence had rebounded in late spring, but the difficult job market made shoppers nervous, says Lynn Franco, director of the Conference Board's Consumer Research Center. Retail chain stores in the U.S. saw a decrease in sales of 5 percent during July.

So retailers must work hard to attract buyers and encourage them to loosen their purse strings, says Wendy Liebmann, president of WSL.

"The state of the economy has clearly intimidated most retailers to take this supposedly safe approach," she notes.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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