E-commerce spending slows

The growth of e-commerce may be slowing, as a majority of U.S. shoppers say they don't plan to increase their online spending over the next three years, a new report found.

Even though roughly three-quarters of consumers say they've bought an item from Amazon in the past year, between 78 percent and 92 percent won't be increasing online shopping frequency, according to new research from The Boston Consulting Group. The number varied by product category and in several – including baby products, food, beverages, fine jewelry, packaged goods and cars – more than 25 percent said they would decrease spending.

In fact, more than twice as many shoppers say they'll spend less online in the next three years than those who plan to increase spending. That intention crosses demographic lines and doesn't vary among millennials, Generation X and Baby Boomers.

"Consumers are notoriously unable to predict their spending patterns," said Michael Silverstein, senior partner at BCG. "However, the findings from this research certainly pour cold water on everyone's expectations for a continuously rising e-commerce world. E-commerce winners will have to earn new dollars and new spending by providing new value. That means me-too players will suffer – and leaders will need to provide more user-friendly websites, lower prices and offers tailored to individual customers."

Some online retailers have scaled back expansion plans and others, such as Gilt Groupe and One Kings Lane, have been acquired by traditional multichannel merchants. Sales through digital channels have slowed too at some retailers, including Walmart.

"E-commerce is a channel, like any form of distribution: Growth does not continue at a rapid, double-digit rate forever," said Silverstein. "Most consumer categories have been available online for several years. The 'newness' is gone, and we're looking at mature levels of penetration in many categories."

For more:
- see this BCG report

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