Report: Cheery Outlook for Holiday E-Shopping Season

Online retail sales for this holiday season are expected to increase by 20 percent over sales from the 2006 season, surpassing US$39 billion, according to JupiterResearch’s U.S. Online Retail Holiday Forecast for 2007.

This growth will be driven not only by veteran online shoppers — who are projected to increase their holiday spending by 13 percent to an average of $314 per person — but also by first-timers. As a category, new online buyers are expected to increase more than 6 percent this year, compared with the number of e-commerce newbies in 2006.

Still Not Mature

The latest growth projections reflect several characteristics of the e-commerce space, report author Patti Freeman Evans told the E-Commerce Times. One is that the online retail market is still not completely mature, so there’s still ample room for double-digit growth. Another factor influencing these numbers is the fact that online buyers tend to be more affluent than shoppers who patronize brick-and-mortar stores exclusively.

Indeed, retailers that have no online presence are eyeing the upcoming holiday season somewhat anxiously. The credit crunch following the subprime mortgage crisis is expected to squeeze many consumers’ budgets. Also, gas prices still remain higher than retailers would like.

Online shopping is less affected by these trends. “It’s already been proven that higher gas prices do not affect online sales,” Freeman Evans said.

“Online commerce is still in growth mode, and the online shopper overall is still a bit insulated from larger macroeconomic trends,” she concluded.

Quick View and Video

Online retailers, for their part, continue to boost their chances of closing sales with the addition of new site features.

For instance, more e-tailers are implementing ‘quick view’ technology that allows a buyer to look at an item without having to click through a number of screens, Freeman Evans noted.

The use of video is also increasing. It has not been broadly implemented yet, she said, but a few retailers — QVC, for one — are using it aggressively to apparent success.

Unrestricted free shipping is becoming more popular as a buyer incentive. “Less and less are we seeing retailers impose restrictions on free shipping,” said Freeman Evans.

Search engine marketing has also become an important strategy for many online retailers seeking that elusive competitive edge.