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Survey: E-Retailers Expect 15 Percent Increase over Last Year's Holidays

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Survey: E-Retailers Expect 15 Percent Increase over Last Year's Holidays

Michael Dinan | November 06, 2008 - TMCnet Editor

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Bucking dark projections for this holiday season, most online retailers say they expect sales to increase at least 15 percent over last year, according to a new survey from a Washington, D.C.-based trade association.

 
According to the so-called “2008 eHoliday study” from Shop.org, a division of the National Retail Federation, about 56 percent of e-retailers are eyeing the 15-plus percent increase – though that number is down from 78 percent last year.
 
Scott Silverman, Shop.org’s executive director, said that online retailers are “resilient, but not immune” to the difficult holiday that this slower economy has wrought.
 
“Retailers will be heavily promotional to attract shoppers on a budget, but have also invested in new site features to improve the online buying experience,” Silverman said.
 
As TMCnet has reported, retailers say they are aggressively leveraging technology by pushing their products through e-mail.
 
According to Anne D’Innocenzio of The Associated Press, Web shopping offers are coming at a “frenetic pace” since online retail has seen a slowdown fueled by an intensifying financial downturn.
 
“Sucharita Mulpuru, an analyst at Forrester Research (News - Alert), expects online retailers to fare better than regular stores this holiday season because of the convenience, the breadth of selection and the perceived value,” D’Innocenzio writes.
 
Yet “there is definitely a significant slowing down” in online shopping, D’Innocenzio quotes Mulpuru as saying. The stock market tumble, a weaker job market and tighter credit have contributed to the problem, the AP writer says.
 
Even so, and despite higher transportation costs than one year ago, retailers aren’t planning to scale back on popular free shipping promotions, according to the NRF study. This year, the majority of retailers (78 percent) plan to offer free shipping with conditions at some point during the holiday season – the same as last year.
 
Many retailers apparently are making up for increased shipping costs by renegotiating terms with shipping providers (40 percent), closely managing company headcount (33 percent), and reducing other promotions (16 percent), the survey says.
 
Also, about 21 percent of retailers say they will require a higher purchase amount for customers to be eligible for free shipping, and about 11 percent say they’ll cut back on usage of free shipping with no conditions.

As they have in holiday seasons past, consumers say that around-the-clock convenience is a major benefit of online shopping.
 
Other reasons include not wanting to fight crowds (41 percent), easy price comparisons (36.4 percent), and free shipping (33 percent). Also, about 23 percent say they’re spending more online due to high gas prices.
 
According to Helen Malani of Shopzilla, many budget-focused consumers begin holiday shopping start looking on the Web for gift ideas and research products.
 
“Whether they make those holiday purchases online or in stores, the Internet will have a tremendous influence on holiday sales this year,” Malani said.
 

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Michael Dinan is a contributing editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Michael�s articles, please visit his columnist page.

Edited by Michael Dinan


By Michael Dinan


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