Retail Sales to Rebound in 2010

Biggest returns will come in the online channel, experts say.

by staff writer
- Jan 13, 2010

Experts say retail sales will begin to rebound this year, and online merchants stand to be the big winners.

U.S. retail sales will increase between 3 percent and 4 percent overall, report economists speaking at the National Retail Federation's Annual Convention & Expo. The online retail sector, however, should more than double that rate of growth, according to analysts at Collins Stewart, an independent financial advisory group.

The firm projects U.S. online retail sales to grow as much as 9 percent, reaching $142.9 billion. Globally, that number could reach $509.5 billion, a 14-percent increase over 2009.

Collins Stewart went as far as to hail 2010 as "the year of online revival" for online ads and e-commerce.

Mark Zandi, chief economist and co-founder of Moody's, seems to agree.

"The economy is looking measurably better than it did a year ago, and it will be measurably better a year from now," he says.

eBay will be no exception… 2010 should be a strong year for the online marketplace

eBay will be no exception. Collins Stewart expects 2010 to be a strong year for the online marketplace, and believes the selection and listings on the site will continue to grow.

"We expect a material rebound in eBay's Marketplaces and [long-term] growth for the PayPal business to exceed e-commerce growth in 2010," the group reports.

Changes implemented over the past year—such as emphasis on DSR, changes in search, encouraging free shipping, buyer protection and fee changes—have already begun to reap benefits for eBay, while new initiatives implemented in late-2009 will deliver positive impact in the first quarter, the analyst firm notes.

The group noted that while retail sales in 2009 decreased about 7 percent overall, online merchants only saw a decline of about 0.5 percent.

e-Commerce is expected rebound even further by 2012, when Collins Stewart expects it to reach $180 billion, an 11-percent increase compared to 2009 when e-commerce sales reached about $132 billion.

At the NRF trade show, Alan Questrom, a former CEO of J.C. Penney Co., asserted it could take five to 10 years for retail sales to completely rebound, and advised merchants—both brick-and-mortar and online vendors—to opt for reduced inventory levels to help shore up profit margins.

"I never saw a retailer go out of business because it had too little inventory, but I've seen them go out of business with too much inventory," he explains.

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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