Posted: 2009-01-02 15:31:16
Shortcut URL: http://t.conquent.com/S100
I read that holiday sales this year were the worst in nearly 40 years (MSNBC), and I figured, heck, it's just like the blacksmith losing sales as horses went away, I'm sure they made up for it online. Unfortunately, online holiday sales were also the lowest since 2001 (Bizjournals).
But let's take a look at the real statistics here. Online sales, while lower, were still $25.5 billion between Thanksgiving and Christmas. That's a drop of about a billion, nothing to sneeze at, but certainly not a complete dead-in-the-water scenario. And while the dire words of this being the worst shopping year in 40 years, we're talking around 1% in sales drop.
The problem is that we're still tied to the idea of growth economics. If you don't make more and more money every year, you're failing. The market gets jittery if you're making the same 25 billion a month, and drops you like a stone -- regardless of the fact that there was 25 BILLION in sales.
Growing a company is important, but making a reasonable profit, consistently, is more important than constant growth. Sure, some of these retailers are going to hurt big time, a lot of stores are going to close. However, I would argue that having a Best Buy, a Circuit City and a Fry's all on the same block isn't offering market differentiation, just unnecessary growth providing unnecessary waste of consumer spending on another box with crappy service.
James: Re: Online/Offline Sales -- is it really that bad?
And you could argue that healthy profits with flat or even declining sales might be due to increased technical productivity reducing labor and other expenses.
That's where you come in ;)