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:
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' :
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:
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.