Retail Detail. Reasons Why Spending Online May Bounce Back First

October 10, 2008 • Shopping


According to, even though consumers are slowing their spending, when the global economy stabilizes, luxury online retailers will most likely be the first to benefit.

Why? Luxury goods companies cater to the growing number of ultra-affluent shoppers who prefer to buy their Dolce & Gabbana dresses, Louis Vuitton handbags and Hermès ties online.

According to a Google study, those who prefer to shop online are richer, younger and spend more on luxury goods overall than those who prefer to shop in brick-and-mortar stores. And even though the Dow Jones industrial average has dropped below 10,000, the ultra-affluent are still expected to spend.

"For the superwealthy, I would suspect a modest slowdown year-over-year for the holiday season," says Brian Sozzi, a retail analyst at New York-based consulting firm Wall Street Strategies, "but not anywhere near those [levels] being seen at the low end, middle income and aspirational wealthy."

Still, spending–both online and off–is about to drop. On Oct, 8, Discover Financial Services released the results of its U.S. Spending Monitor, which dipped for September. Of the 15,000 Americans surveyed, 56% rated the economy as poor, and nearly 70% think it’s getting worse. And 51% are expecting to spend less on discretionary purchases in the next month.

Read more "Why Spending Online May Bounce Back First" here.

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