Early Read on the Holidays: Tickets Drop As Transactions Climb

With one week to go until Cyber Monday, the e-commerce equivalent of the day after Thanksgiving in physical stores, the early read on the 2009 e-commerce holiday-shopping season is that it will probably continue 2008's trends. Last year was most notable for its decline in average tickets as consumers put the clamps on spending, especially on credit cards. The forecast comes from Chase Paymentech Solutions LLC, the merchant-acquiring unit of JPMorgan Chase & Co. and the nation's largest e-commerce acquirer. Chase Paymentech's annual Cyber Holiday Pulse Index monitors sales volume of the 50 largest e-commerce retailers as identified by Internet Retailer magazine. Chase Paymentech claims to process more than half of all Internet payment transactions. Online sales volume for the 2008 holiday season rose a modest 4.5% versus 2007, Chase Paymentech said. The transaction count grew 16.5%, but the average value per transaction fell an unanticipated 10.3%. “In the early weeks of the 2009 holiday season, the story appears similar,” Chase Paymentech said in a report Monday. “Sales volume is up a healthy 9.2% over the same period in 2008. Transactions, however, are up dramatically, with an increase of 22.9%.” Aaron Press, Chase Paymentech's director of market analysis, said in a report that the discrepancy between dollar volume and transaction count “can be attributed to lower average tickets, currently showing a 12.5% decline from 2008.” Chase Paymentech's data derive from online transactions on credit and debit card, gift card redemptions, and various alternative-payment methods. Despite the lower average tickets identified by Chase Paymentech, e-commerce retailers?and consequently their merchant acquirers?still may get enough new transactions to lift their overall fourth-quarter volumes past last year's dismal showings. After three straight quarters of decline, the U.S. Commerce Dept. reported last week that seasonally adjusted online retail sales in the third quarter totaled $34 billion, up 1.8% from $33.4 billion a year earlier. E-commerce sales fell 5.6% year-on-year in 2008's fourth quarter and then were down 5.5% and 4.0% in the first and second quarters of this year, respectively. The first-half decline not withstanding, e-commerce still performed better than overall retailing, where total sales declined by more than 10% and then by 7.5% in the third quarter. E-commerce represented 3.7% of the $922.2 billion in total third-quarter retail sales. The Commerce Dept.'s measure of e-commerce includes sales of goods and services where the buyer places the order on the Internet or the price and terms of the sale are negotiated on the Web, e-mail, or other online systems, but payment is not necessarily made online. Meanwhile, the National Retail Federation's Shop.org division reported Monday that 87% of retailers are planning special Cyber Monday promotions this year, up from 84% last year and 72% in 2007.