News, Wall Street

Uptick in Consumer Spending Online Projected for Q2

Consumer spending online, which has shown more immunity to the market conditions, is projected to increase 8 percent this quarter to $267, compared to an average of $247 last quarter. This is according to the eBillme Online Spending Index, a quarterly survey examining consumer spending trends online.

Despite the slight uptick in online spending, the outlook for offline retail sales remains bleak. This quarter’s Index shows a decline in consumer confidence as we approach the 100-day mark for the Obama administration. Consumer sentiment towards the economy in general and confidence in overall spending has decreased from last quarter. Thirty-nine percent of consumers reported having more confidence in the economy with the 100-day anniversary of the Obama administration approaching. This is down from 51 percent who expected to have more confidence once the new administration began. And when it comes to confidence in overall spending, 19 percent feel more comfortable increasing their everyday spending this quarter, a decline from 28 percent who expected to feel comfortable increasing spending during Q1.

“The slight uptick in online spending this quarter is further evidence that the online retail sector is better withstanding the economic conditions,” says Bruce Cundiff, Director of Payments Research and Consulting for Javelin Strategy & Research. “Overall, consumers are still spending more responsibly and with caution. As we approached inauguration day during Q1, confidence was strong and consumers were hopeful. The continued economic strain, increasing job loss, and consumer debt over the last 90 days has taken a toll on confidence this quarter.”

The Online Spending Index polled 1,200 consumers to measure projected online spending for the quarter and the influencing factors, including the economy, security, and financial control. This quarter’s Index also surveyed respondents about Mother’s Day spending to learn what type of holiday retailers can anticipate this year.

• Twenty percent of respondents plan to make their Mother’s Day purchases online this year.
• Nine percent of consumers anticipate spending more this year for Mother’s Day.