In this week’s Nielsen Online Webinar, “Retail Recession Realities,” I’ll be recommending coping strategies for retailers dealing with the ongoing economic crisis. The news has gone from bad to worse in the past six months, but there are approaches retailers can take to survive the lean times and even come out ahead when (dare I say it?) the economy recovers.

The Web offers opportunities for growth like no other channel. Quick case in point - readership of traditional offline newspapers has declined significantly of late, and with it, the consumption of newspaper circulars. Meanwhile, visitors to online coupon sites increased 42 percent from December 2007 to December 2008. And while an increase in visitors usually leads to a decrease in average time per person, in this case time spent is also up by 28 percent year-over-year, indicating that visitors are more thoroughly engaged.

Please sign up here and join me for the March 11^th Webinar to discuss which online strategies might help your retail business.

I’ve been preparing for our upcoming Webinar on Retail Coping Strategies, where we will provide constructive advice to retailers on how they can best cope with the challenging retail environment that we’re in. This has led me to think about companies that are holding up well through the recession.

There are three companies that I’m particularly interested in: Walmart, Amazon, and Hyundai. Walmart’s US sales grew by 6.7 percent, profits by 11 percent in the fourth quarter of 2008. Amazon just announced that Q4 2008 sales were up 19 percent relative to the same quarter in 2007, with profits (yes, profits) higher than expected. While sales at competitors fell by as much as 55 percent in January, Hyundai’s US sales grew by 14 percent. There are two things that these three companies have in common:

• They are all brands that are closely associated with value.
• They all offer selling propositions that allay consumers’ non-price related perceptions of risk.

My working hypothesis is that what consumers are looking for, above all else in this economy, is alleviation of risk. I should be clear that a critical component of this alleviation of risk is reduction of household debt, which is causing consumers to hold off on purchases and seek lower prices. But I think that it’s bigger than that alone. When consumers are buying, they’re looking for sellers that offer a risk-free proposition.

Walmart, as the largest retailer in the world, carries with it a high degree of comfort. You don’t worry about whether you’ll have problems returning the digital camera bought at Walmart. They’re too big to sweat it. You don’t worry whether orders placed with Amazon will arrive in the expected timeframe. Hyundai’s comprehensive warranty and buyback programs mitigate the risks that you will be saddled with unexpected repairs, or with a lease payment that you can’t afford if you lose your job. (more…)

I spoke with NPR’s Ted Robbins last Sunday about Web traffic growth on Black Friday and online retailers’ overall prospects this holiday season. Click here to listen to the complete interview.

A lot of folks have seen the Black Friday and Cyber Monday releases that we’ve put out, but we’ve also been tracking Web traffic on a daily basis - in total, by category, and by retailer since the Monday before Thanksgiving. Let me share a little bit more data:

Traffic was up by 10 percent on both of the high profile days, where consumers expected that they would be able to find deals. This is certainly better than some might have feared given the state of the economy. When we look at the other days of the week, however, the story is a bit more mixed. Traffic was down a bit on the Saturday and Sunday following Thanksgiving, was down three percent the Tuesday following Cyber Monday, and was up five percent the following Wednesday (December 3rd). If we took a simple average of the year over year growth rates for the Monday before Thanksgiving through Wednesday, December 3rd, the average daily growth rate, relative to 2007 is four percent.

Where it gets interesting, in case you’re not sitting on the edges of your seats already, is when we dig in by category.  The chart below looks at average daily growth, by category.

As you can see, category Web traffic is all over the place.  Beauty, Computer Hardware/Software, Books/Music/Video, General Retail (companies like Wal-Mart.com, Amazon, eBay, etc…) and Apparel are all up, while Toys/Videogames, Comparison Shopping, Jewelry, Flowers & Gifts, and Consumer Electronics are down.  It is important to note that this is a retailer-based classification, not a product based classification, so book traffic to Amazon falls under ‘general retail’ rather than under ‘books/music/video’.

The early prediction:  My instinct is that we will see online sales growth this holiday season, but it will be modest.  If I were forced to hazard a guess, it would probably be in the low single digits (2-4 percent) relative to last year.  I fear that because traffic is up on ‘promotional days,’ it might be an indication of a poor margin holiday season.  The next week and a half are going to be important, but the push by retailers between December 15 and 17th is going to be key.  Those are the days that will likely be the biggest of the year, despite the fact that there’s no catchy name.

Retailers might want to think about a catchy name.

Given the state of the economy, there was particular interest this year in Cyber Monday activity. Would consumers return to work after a long holiday weekend and head online to shop in levels similar to what we saw in prior years? Our data shows they did just that – and then some. Traffic to Nielsen Online’s eShopping Holiday index increased 10% compared to Cyber Monday 2007, with Amazon, Best Buy and Sears showing double-digit increases in unique visitor versus last year. See our full release summarizing Cyber Monday results.