Will High Gas Prices Help or Hurt Online Sales?

Economics is supposed to be a science, but one wonders whether that is entirely accurate. Consider the question of whether higher gas prices are going to help, or hurt online commerce. One point of view is that consumers will drive less, and spend more online.

Michael McNamara, Vice President, Research and Analysis for MasterCard Advisors SpendingPulse, thinks online sales will benefit. "Based on what we've observed in the last three to four years, high gasoline prices typically result in consumers consolidating shopping trips, shopping closer to home, and making fewer trips to the brick and mortar locations as we get to Saturday."

"On the other hand, we've seen the e-Commerce channel benefitting somewhat from this trend," he says.

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," says Andrew Lipsman. "As disposable income shrinks, so too does discretionary spending as manifested in online retail."

"All other factors being equal, we should anticipate a two-percentage point decline in e-commerce spending growth rates versus what we would have otherwise seen.

See http://blog.comscore.com/2011/04/will_rising_gas_prices_threate.html

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