WWD.com/business-news/forecasts-analysis/holiday-online-shopping-forecast-7291518/
government-trade
government-trade

Holiday E-commerce Still Growing

Forrester Research predicted Monday that U.S. online sales this holiday season would reach almost $78 billion, a 15 percent increase from last year.

NEW YORK — E-commerce players can forget those worries about a weak holiday season — they’re still in growth mode.

Forrester Research predicted Monday that U.S. online sales this holiday season would reach almost $78 billion, a 15 percent increase from last year. Not bad, considering overall holiday sales are slated to rise 2.4 percent to 4.5 percent amid weak consumer confidence, economic and governmental concerns and the shortest holiday season in more than a decade.

“This is the third consecutive year that we’re expecting double-digit growth, which is just proving that the Web channel is where people are going to do their holiday shopping,” said Douglas Roberge, researcher serving ebusiness and strategy professionals at Forrester Research. The vast majority of the growth this year, or about 80 percent, will be spurred by people who already shop online.

RELATED CONTENT: WWD Research Roundup >>

The online tactics changed little this year — e-mail marketing is still seen as an effective way to get repeat shoppers, the influence of mobile devices is continuing to grow and Web merchants are still turning to promotions and free shipping to draw customers. Overall, the impact of the digital commerce is expected to be more significant this year. Forty-one percent of all retail sales will be impacted by the Web, according to Roberge.

“By that logic, we think that this holiday season that cross-channel sales will impact about $247 billion in sales,” Roberge said. “Digital is having a huge impact in terms of the sales it drives directly.”

The consumer is still as price conscious as ever — and rather than focusing on the bells and whistles, retailers must make sure their sites are working, experts said. The online winners this holiday season are expected to nail speed, operations and fulfillment. Those surveyed by Forrester specified that lower prices and shipping costs (or free shipping) are the top drivers when it comes to purchasing from an online retailer that they’ve never shopped from before.

Retailers are doing what they can to fend off the online onslaught, trying, for instance, to build on the reputation of the Thanksgiving period as an ubershopping event, opening up while the leftover turkey’s still warm.

Director of consumer economic at IHS Global Insights Chris Christopher said that consumers are realizing they can now get to certain stores on Thanksgiving, opening around 4 p.m. to 5 p.m., making Gray Thursday, or Thanksgiving Day, more relevant as a shopping day.

“That is the dynamic we’re seeing, but all said and done — the clicks are clearly outpacing bricks,” Christopher said.

Just like physical retailers, e-commerce players are also getting in on the action earlier this year.

“The cyber stores are now doing cyber attacks with e-mails or deals, and they will be doing them on Gray Thursday as well,” Christopher said. “This is downplaying Cyber Monday, it’s not as relevant.” According to ComScore, Cyber Monday sales rose 21.7 percent last year to $1.25 billion, with 10 million consumers shopping online.

And while showrooming — searching online for items originally found in-store for a better price — tilts in the favor of Web players, Christopher added that shoppers also reverse showroom, or research goods online and then go to a store to buy them.

The economist said pureplays have to rise to the competitive challenge and can’t depend on people who are home on Thanksgiving to shop online as physical retailers hold doorbuster events. They need to get the message out sooner because shoppers might be heading to the mall or to stores after Thanksgiving dinner.

IHS Global Insights’ projection of online holiday retail sales is a bit higher than that of Forrester’s — with Christopher estimating business to be in the “neighborhood of $81 billion.”