Commentary

Social Media Retail Ads Offer Online Holiday Shopping Incentives

According to results of Shop.org's eHoliday Study, conducted by BIGresearch, 47.1% of retailers surveyed will be increasing their use of social media this holiday season. 60.3% of retailers said they have added or improved their Facebook page, and 58.7% their Twitter pages this year. 65.6% have added or enhanced blogs and RSS feeds. In addition, to provide consumers with an extra incentive to start shopping, 34.3% of retailers say they will offer holiday deals earlier this year.

Shoppers will see changes in retail marketing and promotions this holiday season in response to economic uncertainty. Free shipping offers will abound this holiday season:

  • 79.4% of online retailers will offer free shipping with conditions* at some point during the holiday season
  • 57.4% also plan to offer free shipping without conditions
  • 35.7% said their budgets for free shipping are higher than last year
  • 30.0% said free shipping offers will start earlier than a year ago

 Scott Silverman, Executive Director of Shop.org, says "Retailers... have created promotions and incentives to help Americans save money this holiday season... combining new initiatives with tried-and-true tactics to make their companies stand out."

Online retailers are also compensating for the economy by making operational changes to help them protect their profits. According to the survey, 41.4% of retailers have scaled back on inventory levels and 22.9% have hired fewer people in their stores.

Economic Impact on Online Retailer's Holiday Plans in 2009 vs. 2008 (% of Respondents)

Holiday Plans

% of Retailers

Decreased use of "no condition" free shipping

17%

Starting free shipping earlier

30

Higher discount percentages

16

Lower discount percentages

16

Discounts offered earlier

34

Lower in-store staffing

23

Lower inventories

41

Greater use of social media

47

Source: Shop.org/BIGresearch, October 2009

According to the survey, 45.8% of online retailers expect their holiday sales to increase at least 15% over last year, while 33.9% expect sales to grow up to 14%. As a testament to the economy and the maturity of online retail, just one in five online retailers expects sales to be flat or decline.

In addition to a strong focus on sales and free shipping, many online retailers have revamped their websites this holiday season to make it easier for people to shop. According to the survey, many retailers have added or revamped their sites' :

  • Shopping cart (45.2%)
  • Search capabilities (44.3%)
  • Suggested items (42.9%)
  • Customer ratings and reviews (40.6%)
  • Featured sale pages (37.1%)

Largely due to the convenience of the web, 26.7% of online shoppers said they plan to spend a larger portion of their holiday budget online this year. Reasons behind why people will spend more online range from the ability to shop at all hours of the day, to shoppers feeling it is easier to compare prices, to Americans' insatiable appetite for free shipping. Others said they will spend more online because it's simply more convenient for them, they don't want to fight crowds in stores, or because it's easier to find items.

Top Reasons Why People Will Spend More of Holiday Budget Online This Year

Reason for increasing shopping Online

% of Respondents

24 hour shopping

41.9%

Easier to compare prices

34.0

Free shipping

33.1

More convenient

32.4

No crowds

24.9

Easier to fine items

16.7

Better variety

12.0

Email promotions

10.3

No sales tax

9.9

Avoid checkout lines

9.8

Source: Shop.org/BIGresearch, October 2009

Of the 5.7% of people who plan to spend less of their holiday budget online:

  • 22.8% said that they'll pull back due to expensive shipping charges
  • 12.5% say they like to see or handle items before they buy
  • 10.8% prefer a store experience

A fraction of shoppers said they hesitated to shop online due to concerns about security (1.1%), credit card theft (0.6%), privacy (0.1%) or concerns about retailers tracking online activity (0.1%).

Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch, said "...many people will start their holiday shopping online to find deals, search customer reviews to select products, and get gift ideas... "

According to the survey, 67.3% of shoppers will use a credit card for some online purchases this holiday season, and 35.6% will also use a debit card, while 33.9% will use PayPal for purchases. In addition, 11.5% of shoppers plan to use a gift card or gift certificate to pay for holiday items online this year.

For additional information, please visit  the National Retail Federation here.

 

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