Ecommerce growth stagnated during the recession but was able to finish 2010 with a strong holiday sales season. As the economy recovers and consumers regain confidence they are turning back to credit cards and increasingly shopping online, keeping eCommerce forecasts and online merchants optimistic.
For years now credit cards had been declining in use and popularity for both online and brick and mortar channels. As the recession and credit-crunch continued many consumers closed their credit card accounts in favor of debit, but now credit cards are making a slight comeback. Credit card ownership peaked in the second quarter of 2008 when there were nearly 500 million active accounts, but this was followed by a steep decline down to 378 million credit card accounts by the third quarter of 2010.
After several consecutive quarters of decline, credit card ownership slightly increased by more than 2 million credit card accounts in the fourth quarter of 2010. While this increase is very modest, and is still down 23 percent from the peak of credit card ownership in 2008, it may a signal a reverse in the downward trend and consumer sentiment towards credit cards as the economy recovers and consumer spending gets back on track.
Not only are consumers regaining enough confidence to open new credit card accounts, they are also shopping online. Online retail sales in the U.S. were estimated to be $176.2 billion for 2010, a 12.6 percent increase from the previous year. Forrester Research recently released their US Online Retail Forecast and predicted that online retail will realize a 10 percent compound annual growth rate from 2010 to 2015, ultimately reaching $278.9 billion. Forrester identifies the increased availability of web access through devices like smartphones and tablets, along with the increasing consumer preference and familiarity towards online shopping, as factors contributing to continued eCommerce growth.