According to the National Retail Federation (NRF), U.S. consumers plan on spending an average of $682.74 during the current holiday season. That is a 3.2 percent drop from last year’s $705.01. Online shopping will not escape the effects of today’s economy…
According to the NRF’s 2009 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, overall holiday sales should decline 1.0% to $437.6 billion in 2009. Last year was the first year NRF had seen a decline since it began tracking retail industry sales in 1992.
Worried About Economy
Two thirds of American consumers indicate that the economy will impact their holiday spending plans this year. Of those affected, over 84% will spend less this year. Overall, 53% of consumers plan to spend less according to PriceGrabber.com.
Price is King
Both surveys indicate that consumers are using more money-saving shopping habits. Sales, price discounts and everyday discount prices will be the most important factor as to where they shop and what they buy. People will be shopping for sales more often, using more coupons and putting up last year’s holiday decorations.
Impact on Online Shopping
Depending on which study you believe, online sales will either be slightly down in overall spending or will be up slightly. In either case, online spending growth will outpace most in-store holiday sales, with the probable exception of discount chains.
Where Consumers Plan to Shop
Online shoppers will spend less in retail stores this holiday season, but slightly more online according to The Conference Board. The Conference Board and TNS surveyed 10,000 households across the country, quarterly, and published the results in the Consumer Internet Barometer.
Holiday online shoppers prefer sites that are operated by retail stores and catalog operators such as Walmart.com or Bestbuy.com, followed by online retailers such as Amazon.com and online auction sites such as Ebay.com. According to the Conference Board, the top four online shopping consumer (self-identified) groups consist of:
- Bargain Hunters (44%)
- Die-hard Internet Shoppers (17%)
- Traditional Shoppers who Occasionally Shop Online (15%)
- Last Resort Shoppers (10%)
Why Consumers Prefer to Shop Online for Holiday Gifts
According to the results of the 2008 eHoliday Study, conducted by Shopzilla for Shop.org, 58.6% of consumers in 2008 cited convenience as the reason they shopped online. Other factors they cited:
Online Consumers More Cost Conscious
Whether shopping online or in retail stores, consumers are looking for deals. The prevailing sentiment among online holiday shoppers is that free shipping, coupons and discount offers would encourage them to spend more. About 90 percent of men and women say that free shipping would serve as a motivation to spend more online this season. Other factors that could positively influence them to spend more include special offers and deals not available in stores, coupons/discounts, and free return postage.
Free shipping tops the list because it is perceived as the most frustrating aspect of online shopping. Online retailers would be wise to include a free shipping offer. Consider this:
- 78% of online customers say that exorbitant shipping costs discourage them from online purchases. (Source: E-tailing Group, 2008)
- 61 of the largest 100 online retailers offered free shipping as of the week of Monday, November 10, 2008. (Source: Internet Retailer)
- 90% of respondents say free shipping offers would entice them to spend more online. (Source: The Conference Board Survey, 2008)
- 72% of consumers say that if an e-commerce site eliminated free shipping, they would use another e-commerce site that did offer free shipping. (Source: comScore Survey, 2008)
People are searching for ‘free shipping’ earlier in the Christmas shopping season, and for longer. Searches for free shipping began to rise in October of last year, and actually peaked in the first week of January. (Source: eConsultancy.com, 2009)
It will be interesting to see how this holiday buying season turns out and whether online shopping continues to grab a larger share of the consumer purchasing market.
Here's wishing you "Good Holiday Shopping."
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