Despite a softening in estimated online holiday shopping this year compared to last year, analysts are still predicting double-digit growth with lots of opportunities for e-tailers to cash in on the season.
Online holiday spending will likely decrease from a 23 percent year-over-year growth rate in 2006 to a 21 percent year-over-year growth rate in 2007, says Forrester Research Inc. analyst Sucharita Mulpuru in her report "Outlook for US Online Retail: Holiday 2007."
The good news is that 11 percent of online shoppers said that they would do three-fourths or more of their total holiday spending online, translating to $33 billion in 2007, versus $27 billion in 2006.
So, what exactly are the hot trends for this year? " The category with the greatest number of online spenders is likely to be apparel and accessories: 80 percent of online consumers who responded to our survey said that they would purchase something in this category online during the upcoming holiday season.
Additionally, gift cards promise to be a big winner during the 2007 holiday season: 18 percent of online consumers said that they planned to spend more on gift cards this year, compared with last year's holiday spend," the report states.
Shipping discounts are also still a popular incentive. Sixty-one percent of online consumers agree with the statement "I am more likely to shop online with a retailer that offers free shipping," according to the survey.
Meanwhile, whereas 45 percent of consumers said that they would pay for expedited delivery prior to the 2006 holiday season, only 26 percent of consumers prior to the 2007 holiday season said that they would do the same.
As shopper expectations rise, the willingness to pay for extra service is going down. Holiday shoppers this year say they are less likely to spend on personalization, overnight delivery and gift-wrapping, so offering these types of bonuses for free, if you can, or at bargain rates, could convert more browsers to buyers.
Mulpuru also offers this advice: "Retailers should consider guiding consumers through recommended gift assortments, either through top gift lists or even guided selling solutions like Gifts.com's Personality Finder. Retailers that offer alternative payments in their checkout processes are also at an advantage because consumers appreciate alternative ways to pay."
Michelle Megna is managing editor of ECommerce-Guide.com.
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