Christmas in July: Why holiday 2009 looks promising for consumer technology retailers on the web

We’ve all heard the term "˜Christmas in July’, but have you ever wondered where it came from? It originated in Europe to describe overheated residents’ summer cravings for cool December weather. And just as the Europeans yearned for a break from the heat, US retailers are dreaming of strong sales for the 2009 holiday season after months of trying economic times. But is this upcoming holiday season the one that will bring retailers back to better days?

In my work, I focus on consumer technology (e.g. wireless, computers, printers, handsets, etc.), so in order to "write what I know" I looked at clickstream data from December 2007 and 2008 to gauge the trends in holiday shopping activity online. I then compared June data for 2007-2009 to get a read on where we’re headed so far this year.

Despite a weak economy in 2009, consumer technology retailers may get their wish, at least online.

The chart below shows the percent growth in both the traffic and online order volume at consumer technology sites* from December 2007, as compared to December 2008.

What does this data tell us about holiday shopping?

  • Despite the poor economy, about 85 million people visited the designated consumer technology shopping sites in December 2008, up 12% from the same period in 2007.
  • This increase in traffic also meant more buying, with online orders increasing 23% from December 2007 to December 2008.
  • Additional data (not charted) shows that individuals made more online shopping trips last year. In December 2008, online visitors shopped on these designated consumer technology sites an average of 3.3 times throughout the month. This was 17% higher than the 2.8 times visitors shopped online in December 2007.

So it looks like traffic and sales on these sites have been trending upward when we compare December 2007 and 2008. However, given all that’s happened since December, I decided to look at how interest and orders in June 2009 compared to previous years to see if there are any signs that sales or interest are flagging. The chart below shows this comparison in terms of year over year growth.

Again we see that there was significant growth in both traffic and orders year over year. What does this data tell us about what has transpired so far in 2009?

  • Growth in online traffic more than tripled from June 2007 to June 2009, with an increase in visitors from 66 million to 83 million.
  • Although big product releases like the Apple iPhone 3GS and the Palm Pre helped drive June 2009 traffic volumes and orders, other retailers like Dell and Verizon Wireless also saw significant increases.

Obviously, there are limitations to looking back in time to predict the future, especially when we’ve seen so many changes. In the consumer technology industry, we’ve seen several significant product releases this year, particularly new wireless devices. We’ve also seen big macroeconomic changes in the forms of a stumbling economy and a new administration.

So, what are my predictions for Holiday 2009? The early indicators look positive for consumer technology. As my daughter’s Magic Eight Ball says, "signs point to yes" — meaning that online shopping and buying should be good this year in the consumer technology space. You can be sure we’ll keep an eye on it and let you know.