Analysis: Recession Increases Online Shopping

Since 2007, after the recession, online shopping has been booming more than ever. The recession started in October 2007, and affected a major part of the world. It caused many to lose their jobs, and thus reduced household income.

Research showed that the recession hit over 70% of the population only in the United States; for example, researched suggested that 32% of American’s lost their jobs, 28% had their work hours reduced, 12% had to take unpaid leave, 11% had to switch to a part-time schedule, and 23% had to take a pay cut. This shows that income in an American household had reduced considerably (CreditLoan, 2010). Furthermore, this recession had not only hit American but also the rest of the world. During the deepest recession of all items, online shopping in Japan rose by 22% (Bloomberg, 2009).

“Shoppers started to shop online more, rather than in physical stores, after this great recession hit them"

There were counter recessionary characteristics to shopping online; higher discounts, price comparisons made easier and convenience. Research was conducted in 2009 to discuss if recession effected online shopping (Ford T & Rhodes S, 2010). The research was conducted with a 100 participants. The results showed that over 67% of the correspondents said that they shopped online, and over 62% of the online shoppers did so on a monthly basis.

24% of this research population believed that the economy will worsen in the upcoming years, and hence their situation will worsen as well.  Another similar research study indicated that people that believe the economy is going to worsen in the upcoming time tend to shop online more than the others currently. Furthermore, although some consumers are aware that soon the economy will improve and consumer confidence will increase, they will maintain a decreased spending level in an attempt to rebuild their lost savings.

In 2009, during Christmas, Black Friday and Cyber Monday online sales had the strongest numbers compared to 2008. There was a 13% growth overall from 2008 to 2009; this showed as soon as the recession had started people already approached the Internet for better deals and better shopping. 2008 had lowest shopping rates overall since this was the deepest point of the recession.

Each year the growth rate rises and this has caused clothing companies to increasingly photograph their products causing a rise in photographers and their costs. iShopShape has recently launched a new product called StyleShoots, that will help most firms save costs and speed up the time that it takes to bring apparel photographs onto their websites.

Anders Jorgensen