Online Stores to Emphasize Holiday Promotions

Online merchants hope to entice buyers this holiday season with free shipping and social media.

Online merchants hope to entice buyers this holiday season with free shipping and social media.

This story first appeared in the October 23, 2009 issue of WWD.  Subscribe Today.

Almost 80 percent of retailers said they plan to offer free shipping during the holiday season, and more than one-third said their budgets for it have gone up since last year, according to a National Retail Federation report Thursday.

A majority of retailers have been working on their Facebook pages, Twitter feeds and blogs, and 47.1 percent said they plan to increase their use of social media during the holidays.

“Retailers know that times are tough, so they have created promotions and incentives to help Americans save money this holiday season,” said Scott Silverman, executive director of the NRF’s Shop.org. “From free shipping to Facebook, online retailers are combining new initiatives with tried-and-true tactics to make their companies stand out.”

Meanwhile, they have scaled back on operational expenses. More than 40 percent of merchants trimmed inventory and 22.9 percent hired fewer employees. Nonetheless, the outlook is positive: About 80 percent said they expect online sales to increase.

For their part, shoppers said they are attracted to the online channel because it is convenient. About one-quarter of online shoppers said they plan to spend more of their holiday budget online this year. They cited the ability to shop at all hours, ease of price comparison and absence of crowds. Free shipping was a factor for 33.1 percent.

Among the 5.7 percent of people who said they planned to cut back spending online, 22.8 percent cited shipping fees, 12.5 percent said they like to see items before they buy and 10.8 percent said they prefer the in-store experience.

The eHoliday Study was conducted by BIGresearch and surveyed 70 online retailers and 2,623 consumers in September and October.