by Doug Desjardins
While early projections are calling for a modest 2- to 3-percent increase in holiday retail sales, analysts are looking for much bigger things from online sales.
Research firm comScore is projecting a 7- to 9-percent increase in online holiday spending, far higher than forecasts for physical stores
and double the 4-percent increase reported last year. But analysts say that preliminary forecast is subject to change in what is still an uncertain economy where unemployment, the stock market and consumer confidence are still shaky.
“If any those weaken between now and the end of the shopping season, it’s almost unavoidable that we’ll see less spending than we’ve forecast,” said comScore chairman Gian Fulgoni.
Analysts are also expecting stronger online promotions as retailers look to gain market share in an online sector that’s consistently outgained brick-and-mortar sales. Wal-Mart is pulling out the stops to gain on #1 online retailer Amazon.com with new efforts to gain market share. It recently launched two new programs in time for the holiday season that allows consumers to buy products online and pick them within hours at their local Wal-Mart or Fed-Ex outlet.
“It’s pretty clear that Wal-Mart doesn’t like being number two or three,” said Fulgoni. “They’ve publicly said that e-commerce is a strategic focus for them on a global basis.”
The National Retail Federation (NFR) is also projecting strong online sales. In its annual holiday shopping survey, the NRF found that 64 percent of retailers say they expect online sales revenue to increase at least 15 percent this year, up from 45.8 percent who expected that large an increase last year. And 40 percent of retailers say they’ll begin they’re online shopping promotions in the first week of November.
“Retailers continue to see the web as a bright spot in the industry and are putting the finishing touches on new site features so their customers will have a good experience when shopping online this holiday season,” said Fiona Swerdlow, head of research for the NRF’s shop.org division. “In addition to using web sites to bring in sales, retailers are leveraging the Internet to encourage shoppers to head to nearby stores, featuring store locator information, product availability and store circulars on the web sites.”
The enthusiasm retailers have for online holiday sales is supported in a recent survey of consumers conducted by the NPD Group. The survey shows 35 percent of consumers plan to do at least some of their shopping online, well ahead of national chains at 29 percent and second-only to discount stores at 54 percent.
NPD Group chief analyst Marshall Cohen also noted that “44 percent of consumers told NPD they plan to look around (online) for the best price and value before they buy, which could benefit online sales.”
Resources
Comscore Sees Holiday Online Spending up 7-9 Percent
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