But let’s not get too cocky just yet. The terrorism threat is still for real, even with the Taliban getting kicked in the "you know where." I know what went through all our minds when we saw that latest plane crash in New York. The "T" word was back in full force! That crash was a truly tragic event with massive loss of life and property; yet, when experts said the cause was mechanical failure of some sort, it’s amazing how the financial markets rejoiced. Let’s also not forget that business fundamentals, in general, are still quite weak, even with Greenspan’s nth rate cut. But things overall are looking rosier than they were just a few weeks ago.
I wonder what kind of a Christmas online retailers are going to have this year. As we saw in the news this week, retail sales locally plunged 20 percent in the first 10 months of the year, prompting industry leaders to predict a bleak holiday season. Industrialist Raul T. Concepcion was even quoted as saying, "There will be no Christmas in December." With the possible exception of the food sector which will benefit from the long holiday ahead, retail demand is going to be weak.
The same can be said for retail globally. Given the significant loss of jobs around the world, there will be less consumer spending anyway (for that matter, less corporate spending as well). In the U.S., Thanksgiving is usually one of the very busiest travel and shopping times. Well, I read somewhere that there may be anywhere from a 50 to 65 percent cut in travel this Thanksgiving. More people are just going to stay home.
So what can online retailers expect? Some say the recent world events may actually help sales online. Less people are traveling, less people are going to the shopping malls nowadays, so maybe they start buying more online. This is indeed a possibility. Over the last couple of weeks, I’ve been to a few of the malls locally. Even on a weeknight, it’s usually a challenge to find parking. Yet for these last few trips of mine, there was plenty of parking to be had. The malls definitely look less busy.
Getting back to the U.S. market, some argue that because of the anthrax threat, there will be quite a number who would be wary to receive packages over the mail. And of course, online retail is essentially delivered by mail or courier service. So what’s going to happen?
My bet is that while overall retail spending is going to be down this year, certain western online retailers are going to be in good shape. The very best online retailers are going to see increased sales volumes. But with the overall retail pie shrinking this year, this online increase is going to come at the expense of weaker brick-and-mortar players. Of course, in countries like ours where PC penetration remains very low, the hope is with the overseas Filipino markets, particularly the Fil-Am community. Unfortunately, just as we’ve seen in the overall dollar remittances, there’s also going to be less spending from this sector this year.
One thing, however, remains clear as far as I’m concerned. Those corporations and individuals who stop feeling sorry for themselves and start planning and executing for the future (maybe even strategically spending a bit) are going to be the winners over the long haul. So let’s get with it!