Online Sales Expected to Slow PaceOnline retailers expect sales growth to slow this holiday season from recent years, but more than half those surveyed by an industry group anticipate ringing up at least a 15% increase from last year.
"Online retailers are resilient when it comes to the economy, but they're not immune," said Scott Silverman, executive director of Shop.org, a unit of the National Retail Federation. He attributed the slower growth partly to the maturation of the online market. "It's challenging to keep up those really high growth rates."
The survey of 60 online retailers was conducted for Shop.org from Oct. 1 through 20. Shop.org expects online retail sales to rise 17% for the whole year to $204 billion. Online Sales for kids shoes and childrens shoes are still going strong. Heading into the key holiday season, retailers may be in for more tough times, according to Joe Feldman, senior research analyst at Telsey Advisory Group. Kelsey Hubbard reviews the sector's latest round of results. (Nov. 6)
"With consumers looking to save money due to the economy, the savings factor is playing a key role in keeping online shopping growing," Mr. Silverman said. "Consumers can comparison shop much more easily [online] than in other retail formats." In a survey of 2,040 shoppers conducted Sept. 29 through Oct. 3, Shop.org found that 23% said they were spending more online due to high gas prices.
While the 56% of online retailers who expect at least 15% sales growth this holiday season appears strong, it is well below the portion who have expressed such optimism in recent years. Last year, 78% of retailers forecast at least 15% sales growth.
A majority of the online retailers surveyed in October said they plan to offer free shipping to attract customers, but 21% of them said they would raise the minimum purchase requirement this year.
Retailers also said were focused on revamping Web sites to increase online sales: 43% said they are adding product videos, 33% are adding customer reviews and 25% are creating Facebook pages to promote their sites. To appeal to price-conscious customers, 27% said they are adding clearance-sale pages to their sites.
