November 2, 2010

Online retailers predict strong holiday sales

Special promotions set to begin this week

The holiday season may be merry and bright for online retailers, according to results of Shop.org’s eHoliday Study conducted by BIGresearch. Nearly two-thirds of retailers (63.8%) expect their company’s online sales to grow by fifteen percent or more compared to last holiday season, up from less than half of retailers (45.8%) who had those expectations last year.

“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 good experiences when shopping online this holiday season,” said Shop.org head of research Fiona Swerdlow. “In addition to using websites 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 their websites.”

As many shoppers begin thinking ahead to the holidays, online retailers are also in holiday mode. According to the survey, 40 percent of online retailers will begin holiday marketing by Halloween with another 40 percent planning to begin marketing the week of November 1.

Even though online retailers are expecting strong holiday sales, they’re not planning to abandon some of the web’s most alluring incentives, including free shipping. Four out of five online retailers (84.8%) will offer free shipping at some point during the holiday season, and nearly one-third (31.4%) said these offers will begin earlier this year than a year ago. Shoppers may even see more free shipping deals this year, as 36.7 percent of retailers said their budget for free shipping is higher than last holiday season.

As online retail continues to grow, companies have been investing in site features and services to maximize their holiday sales. According to the survey, the majority of retailers (72.5%) say they have invested in the company’s Facebook page in advance of the holidays. Additionally, more than half said they have invested in cross-selling on product pages (54.9%), site search (54.9%) and customer ratings and reviews (52.9%). Another 43.1 percent of retailers say they have invested more this holiday season in a Twitter campaign or Twitter feed.

“Online retailers know shoppers care about low prices and free shipping, but they also appreciate the ability to easily find gift ideas or shop around the clock,” said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. “Instead of trying to entice shoppers to come to them, retailers will be leveraging social media in an even more vibrant way this holiday season to reach consumers where they already are: Facebook, Twitter and YouTube.”

About one-third (32.2%) of online shoppers say they’ll make more of their holiday purchases on the web this year, listing 24-hour convenience (35.1%), easy price comparisons (33.1%) and a lack of desire to fight the crowds (30.8%) among the main reasons why they’re shifting a portion of their spending. Online shoppers who say they’ll spend less of their holiday budget online than a year ago (6.1%) cite expensive shipping charges (19.2%), a preference to see or handle an item before purchasing (13.9%) or not wanting to wait for the item to be delivered (5.7%) as potential hindrances to spending more online.