eMarketer's Predictions - US Retail ECommerce - Should we pay attention?

First the excerpt:

eMarketer has revised its forecast of US retail e-commerce sales growth after a lackluster first half of 2009. Retail e-commerce sales, excluding travel, are expected to contract by 3.1% this year.

Growth will resume in 2010, at 5.5%, as consumer spending recovers from the recession. By 2011, eMarketer expects pent-up demand to accelerate growth, peaking in 2012. Retail e-commerce sales will continue to increase, but the rate of growth will fall off in 2013, continuing the pre-recession trend of strong but slowing growth.

Previously, eMarketer projected flat growth for retail e-commerce, expecting declines in the first half of the year followed by second-half recovery. But August figures from the US Department of Commerce (DOC) show sales decreased more than expected in Q2, falling 4.5% year over year to $30.77 billion.

Our comments:

I am often amused by the lack of accuracy of predictions. Despite constant revisions they still fail to be accurate.

I firmly believe that predictions and forecasts should be based on "what is really happening at the ground level". However, many research associations still keep throwing macro economic data into in-house forecasting models (that are often inadequate and irrelevant) and use the results to make predictions that are "way off the mark".

There was a great article by Carl Bialik (Numbers Guy) in WSJ edition of 12th August. The article was called Forecast: Next Year to Arrive in 2010-ish. It describes how "Crystal Balls have become Hazy" in times like these.

Its "impossible to make accurate predictions". However, by keeping ear to the ground, one can make forecasts that are far more accurate than outdated forecasting models.

- Udayan Bose

Comments

[Nick Valente]

Udayan,

Good observations. Rather than following Crystal Balls, times like these benefit those who execute on the basics of sound business practices within their industry. Know your space; know your competitors and above all listen and communicate with your customers.