Online consumer electronics sales decline narrows

Holiday videogame transactions jump, DVD and CD revenue plunges

By Danny King -- Video Business, 1/5/2009

JAN. 5 | U.S. online sales of consumer electronics items appeared to improve toward the tail end of the holiday season and outperformed offline consumer electronics sales, while slumping DVD and CD sales got worse toward the end of the year, ComScore said in a statement late last week. Videogame sales over the Internet continued their year-long surge.

Internet sales of consumer electronics for the 24 days ended Dec. 24 fell 5% from a year earlier, compared to a 3% decrease across all categories. The decline was narrower than both the 9% drop in online revenue for the 19 days ended Dec. 19 and the 26% plunge in both online and offline sales of electronics and appliances between Nov. 1 and Dec. 24, ComScore said, citing MasterCard Advisors' SpendingPulse division.

"E-commerce trends outperformed overall consumer spending in several product categories, which is to say that e-commerce continued to capture an increasing share of consumers’ wallets," ComScore chairman Gian Fulgoni said in a statement.

Meanwhile, videogame sales during the holiday season jumped 14%, making it the second-largest online spending category behind sports and fitness items, ComScore said. Overall, U.S. videogames sales through November increased 22% from a year earlier to $16 billion, NPD Group said last month.

Still, higher Internet traffic wasn't enough to prevent online DVD and CD sales from dropping. Internet holiday spending on music, movies and videos plunged 32% as of Christmas Eve, accelerating from a 24% drop on Dec. 19, and making it the worst performing category among all retail items, ComScore said.

Last week, ComScore said overall U.S. online retail spending for the holiday season fell 3% from a year earlier to $25.5 billion despite higher Internet traffic, marking the first year-over-year drop since such sales began being tracked in 2001 and illustrating the effect of a slowing economy.

Retailers both online and offline experienced lower holiday sales because of the combination of the U.S. economic downturn, bad weather and the need to discount items in order to move inventory. The International Council of Shopping Centers last week said holiday sales at U.S. chain retailers fell 1.8% from a year earlier, marking their worst holiday season since at least 1970.

U.S. year-over-year online spending change Dec. 1-24

Source: ComScore