It's not just the stock market that is up. My local WalMart opens at 5AM with a $178 LCD TV as a doorbuster.
Online retail growth forecast
2 studies see sales accelerating as much as 25 percent
AP
Tuesday, November 1, 2005
Online retailers are expected to have a cheerful holiday season thanks to legions of new shoppers buying gifts over the Internet, say two new forecasts.
Sales will grow 18 percent over last year to $26 billion, according to a report released Monday by JupiterResearch. A more optimistic study to be released today by Forrester Research predicts that online holiday sales will jump 25 percent to $18 billion.
The forecasts show that the e-commerce is still strong 10 years after the founding of industry giants Amazon.com and eBay. Shoppers continue to migrate online, lured by convenience, a proliferation of free shipping offers and the prospect of saving money by driving less -- given the current high gasoline prices.
"Online shoppers never have to get in the car," said Heather Dougherty, a retail analyst for Nielsen/NetRatings. "Gas prices will also help drive a lot of research online as people take a look at what is available."
Carrie Johnson of Forrester Research added that low consumer confidence could have a negative impact, however. And because consumers are spending more to heat their houses and drive their cars, they may have less money to spend on holiday gifts, even if they buy online.
"The lumps of coal seem to be piling up in online retailers' stockings," Johnson wrote. "Still, we're predicting a good -- albeit not great -- online holiday season this year."
The expected growth is in line with last year's results.
As in the offline world, the holidays are a critical period for online retailers. Sales during this short period account for around a third of all revenue for e-commerce.
Some of the differences in various online holiday sales forecasts is due to different time frames they use. Forrester Research's designates the holiday period as being from Thanksgiving to Christmas while JupiterResearch counts all sales in November and December.
Whatever the case, e-commerce remains only a fraction of overall retailing.
Much of the expected growth in online shopping is attributed to more buyers. JupiterResearch expects an 11 percent increase, including many who have never shopped online before.
Experienced shoppers, according to JupiterResearch, will increase spending only a modest 4 percent.
A bonanza of free shipping offers are expected, even more than previous years, according to analysts. However, if the past is any indication, the offers may be limited to purchases over a fixed amount.
One exception is L.L. Bean, the clothing retailer, which is offering a throw back to the dot-com boom days: free shipping with no minimum, for a limited time only.
Because some consumers are feeling the pinch of high energy costs, many are looking to free shipping as a way to save money, according to JupiterResearch. In a survey, 56 percent of consumers who said they intend to buy online this holiday season said free shipping is more important this year than it has been in the past.
Dougherty, the Nielsen/NetRatings analyst, said that the online shopping experience won't necessarily be very different this year. But she did say that more retailers are making gift cards redeemable online and that a lot more will try to offer products that are tied to a charity (or simply a solicitation for a charitable donation), partly in reaction to natural disasters in the Gulf of Mexico and abroad.
While the holidays should be strong for e-commerce, the months just after may be shaky, according to Forrester Research. The full brunt of high heating costs -- potentially adding $700 in extra costs per household -- will likely hit consumer spending hard as the weather gets colder in January and beyond, the company warned. |
