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BizReport : Ecommerce archives : April 19, 2011

Do rising gas prices drive consumers online?

Many believe that higher gas prices will drive consumers online and push up online sales. But comScore warns that this isn't always the case and the price at the pump could actually curb online shopping.

by Helen Leggatt

2003-10-24-nozzle-photo.jpgGasoline prices increased 33 cents per gallon last month, making a serious dent in the wallet for many.

MasterCard Advisors' recent SpendingPulse report claims the pain at the pump will result in consumers making fewer trips to the high street and shopping closer to home.

The report also claims that, while higher gas prices will impact on the overall economic recovery in the US, they are expected to contribute to an increase in ecommerce activity.

As gas prices have risen, online sales have grown for the fifth consecutive month, found MasterCard. Ecommerce sales increased 16.1% in March, compared to last year, even higher than February's 13.2% rise in sales.

However, not everyone agrees that increased gas prices directly benefit online retailers.

According to comScore, an increase in gas prices may actually trigger a decrease in non-essential, or discretionary spending. Instead of forgoing car trips and using the money that would be spent on gas towards online purchases, consumers are more likely to decrease online spending and use those funds towards the purchase of gas.

"I think it's fair to say that rapidly rising retail gas prices are cause for concern for the retail e-commerce sector," writes Andrew Lipsman on the comScore blog. "As disposable income shrinks, so too does discretionary spending as manifested in online retail."

Tags: consumer spending, ecommerce, gasoline price, online spending, US economy

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