A Forrester Research Inc. report predicted Monday that online retail sales in all categories except travel will reach $44.7 billion during November and December, an increase of 8 percent over 2008.
This story first appeared in the November 3, 2009 issue of WWD. Subscribe Today.
“Despite the lingering effects of the global financial crisis, the online space remains the retail industry’s growth engine,” the report said.
Relatively slow sales following the collapse of Lehman Brothers and the freezing of the credit markets in October last year make it easier for retailers to show strong growth this holiday period, the report acknowledged. In addition, the number of consumers saying they plan to buy products and services online this season increased 2 percent to 94 percent this year. Among retailers, 72 percent said they expect an increase in sales in the period.
Apparel and accessories are expected to do better than other categories, while computer software and hardware and books will lag. The number of online buyers who said they plan to spend more on apparel and accessories increased by 4 percentage points this year. However, consumers will still be looking for bargains, so retailers are advised to adjust prices, and offer free shipping and other merchandising strategies accordingly.
Large retailers have been doing better than small merchants in Forrester’s surveys, with only 21 percent of large companies reporting a decrease in online sales versus 39 percent of small retailers, probably because bigger merchants have deeper pockets and stronger marketing, according to Forrester. Mass retailers such as Wal-Mart Stores are expected to do well, with 24 percent of buyers saying they plan to try lower-cost alternatives to brands they normally buy. Thirty-three percent of online buyers said they plan to shop at mass merchandisers during November and December.
Free shipping is the most popular online offer, and 42 percent of online customers reported they will buy more online this year than in the past because of it.
Last year, online holiday sales reached $41.4 billion, an increase of 5 percent over the previous year. For the five years before that, growth was in the double digits.