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Holiday '07 Going Out With A Whimper?

Last week, Mark Ballard analyzed Holiday 2006 vs. Holiday 2007 across our client base. He looked at sales driven by paid search across our clients, restricting his view to clients we've been serving for over a year, to have valid same-site comps. His was a careful analysis, looking at medians and trimmed means, and treating all clients equally, to ensure the results of our largest clients didn't dominate. I'm comfortable with the method and the sample size, and would be so bold as to suggest his conclusions are reasonably representative of the overall B2C web online retailing experience this season. Mark found that
  1. Comparing last year to this year, more holiday buying has shifted online.Our clients are seeing 10% to 70% increases in their web sales, total web as well as PPC-driven web, '07 vs. 06.Our clients' total business aren't seeing overall revenue growth like this -- clearly this is just web stealing share from stores, call centers, and catalogs.
  2. Earlier weeks of Holiday '07 were stronger (relative to last year) than more recent weeks. While online sales are still very strong, and are much stronger this year than last year, the relative amount of that strength has been fading. This is an ominous sign. These rates should be increasing, not decreasing, as we head into the final days of Holiday 2007.
The 2007 and 2006 retail calendars line up pretty well -- weekdays between Thanksgiving and Christmas, etc. So, we repeated the prior analysis starting earlier, and disaggregating weeks down into days. The results aren't encouraging. q4 holiday 2007 vs. 2006   comp-site sales This blue line in the graph shows the median lift in comp-site sales, this year's holiday vs. last year. The red line is a best-fit linear trend. The downward slope of the red line indicates the holiday lift, last year vs. this, is eroding. The news media is full of stories about slowing holiday sales in retail stores. While our typical client is enjoying strong year-over-year growth in their web businesses, I fear these gains aren't incremental, simply channel shift. And, even online, I think we're seeing the economy starting to slow. google trends: "recession"
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