U.S. retail sales fell sharply during January, driven by a 0.8% drop in petrol and car sales, new figures released by Commerce Department have revealed.
These results have puzzled industry experts, as the declining price of gasoline was expected to prompt MORE spending. However, it seems consumers want to save, rather than splurge, their additional disposable income.
What makes it even more unusual is the fact that employment levels have risen consecutively for the past 11 months, with an extra 275,000 Americans finding jobs during January alone.
Excluding petrol and car figures, the remaining retail sales increased by a modest 0.1%, but certain sectors were badly impacted. For example, sales of sports goods fell 2.6% in a month when more people are on a health kick than at any other time of the year, while clothing store results dropped 0.8%.
Economists are concerned that these disappointing figures could be a sign of weak growth by the U.S. economy.
It does seem that – despite the country recovering much more strongly from global recession than many other leading nations – U.S. consumer confidence is lacking when it comes to retail spending. As a result of these figures, economists have reduced their U.S. growth predictions from 3% to 2.5%.
What does this mean for ecommerce retailers?
It’s obvious that consumers are being careful where they spend their money, but this shouldn’t necessarily worry online retailers; it just means you have to work harder for your share of the market.
For instance, running a limited edition promotion is an effective way to kick-start commercial activity, especially in this cautious spending environment.
Other ways to generate increased online business include:
- Offer free delivery for orders over a certain cart size.
- Highlight seasonal products on high traffic website pages, such as your homepage.
- Email market to your online database, preferably with a loyal customer offer to drive maximum results.
- Optimize your website for mobile shoppers; mobile retail revenue in the USA has now passed the $12 billion mark.
- Carry out a digital audit of your website, checking you’ve used the right keywords to drive traffic to your site.
- Research your competitors and see what they’re offering online that you’re currently not.
- Review your website analytics to see which pages are attracting traffic, and which aren’t – and experiment with changes to the words and layout on those that are performing poorly.
- Launch a Google Adwords campaign to attract new business through pay per click advertising.
- Don’t stop communicating with customers just because they’ve bought something; building brand conversations is the most effective way to nurture long-term, high value customer relationships.
The powerful unique advantage of selling online is that you can respond to consumers in real-time, and monitor their activities closely and comprehensively – building up a more detailed picture of every shopper as a result.
So, while declining sales is a concern, ecommerce retailers in the U.S. shouldn’t lose too much sleep. Overall, U.S. consumer fortunes are on the rise, consumer spending will soon catch up, and in the meantime, an effective conversion strategy will ensure that those who are shopping are more likely to buy.