High Gasoline Prices Could Be Good for Online Retailers | Technology from AllBusiness.com
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High Gasoline Prices Could Be Good for Online Retailers

Gasoline prices go up, so does the number of paid-search clicks.

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Gasoline prices go up, so does the number of paid-search clicks. That’s the findings of a new study from Marin Software, which noted that there is a correlation between energy prices and online shopping.

This really shouldn’t come as a surprise.

Drivers are actually driving less, and some fuel analysts have suggested that it is just part of the supply and demand. While summer is typically a high driving season, some consumers are looking to limit the number of trips they are making, and thus letting their fingers do the driving.

Many retailers are still providing free shipping, and despite higher fuel prices – which typically increase the price of all goods – many consumer products are still quite reasonable. This is because brick and mortar retailers are fending off competition from online merchants.

To stay competitive the online merchants often need to make shipping affordable. The result is that it is cheaper to do comparison shopping online. If shipping costs bring the price too high, consumers are heading back to the retail store.

April of this year actually saw the highest single month of year-over-year growth since July 2007 for e-commerce, jumping more than 19 percent from April 2010.

It will certainly be interesting to see how traditional retailers react if – and some analysts say when – gasoline prices break the $5 a gallon price. So far, while prices are high, this is only a replay of gasoline in 2008 so many drivers may be “pump drunk.”

Of course, there are good signs for drivers – gasoline slipped under a $100 a barrel last Thursday, and that aforementioned supply and demand could also result in some folks driving less. Factored together, prices could ease at the pump.

But the comparison to shopping online certainly won’t decrease. Gasoline prices aren’t the only factor playing a role in the rise of online retailing. The other factor is convenience. This has been seen for more than a decade, but with gasoline prices high as well, online shopping could certainly see another boom.

And there is also another factor to consider in the year-over-year growth. A year ago things were still looking bleak, and the economy has certainly seen recovery. All these factors, gasoline prices, consumer confidence, slowing unemployment along with hiring, and that convenience factor could all add up more online shopping.

All this could trickle down from large retailers to medium and even small retailers, at least those with a Web-based presence. With more people clicking more than driving, now is certainly another reason to get online if you’re not already there.

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