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Online Holiday Sales Forecast - eMarketer Nov 2011

Online Holiday Sales Forecast - eMarketer Nov 2011

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Digital Intelligence
Copyright ©2011 eMarketer, Inc. All rights reserved.
November 2011
Executive Summary:
US retail ecommerce holiday sales (excluding travel) will reach $46.7 billion in 2011, up16.8% over 2010. By comparison, total retail sales will see meager growth o about 3%. Online holiday sales will bedriven by consumers who allocate a larger share o their git spending to the internet to nd savings and to takeadvantage o ecommerce’s greater convenience.
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The two drivers o holiday ecommerce sales growth continue tobe more online buyers and greater spending per online buyer.This year, higher-income consumers will lead the charge online.Their online purchasing will rival or surpass what they spend inother venues, like department stores, apparel stores and homeelectronics stores.Online holiday sales will also get a boost rom smartphone andtablet users. Some plan to use their mobile devices or holidaypurchases. Others will use them in-store or product researchand price comparison, which in turn oten leads to online sales.
Key Questions
What is the outlook or online holiday sales this yearcompared with recent years?
What are the mind-sets o consumers and retailers thisholiday season?
Why will ecommerce sales grow at a higher rate than totalretail sales?
billions and % change
US Retail Ecommerce Holiday Season Sales, 2006-2011
2006$26.42007$31.619.4%$29.1-7.8%2009$34.016.9%2010$39.917.4%2011$46.716.8%Retail ecommerce sales% change
Note: sales are for Nov and Dec of each year; excludes online travel, event ticket and digital download sales Source: eMarketer, Nov 2011
133717 www.
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2008
 Jeffrey Grau jgrau@emarketer.com
Contributors
Krista Garcia
Online HolidaySales Forecast:
Savings and Convenience Will DriveStrong Sales
 
Online Holiday Sales Forecast:
Savings and Convenience Will Drive Strong Sales
 
Copyright ©2011 eMarketer, Inc. All rights reserved.
2
The eMarketer View
Key eMarketer Numbers—US Online Holiday SalesForecast
Retail ecommerce sales (billions)Retail ecommerce sales growth (% change)$39.9$46.7Holiday season*17.4%16.8%Holiday season*Full year$167.3
(1)
$195.0Full year15.2%
(1)
16.5%20102011201020112010201120102011
Note: excludes online travel, event tickets and digital download sales;*sales are for Nov and Dec of each year  Source: eMarketer, Nov 2011; (1) US Department of Commerce, Aug 2011
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Online Holiday Season Sales Dened
eMarketer, like the National Retail Federation (NRF),denes the holiday season as November and December.Holidays in this period include Thanksgiving, Christmas,Hanukkah and Kwanzaa. To be clear, holiday seasonsales reer to all retail spending—purchases eitherrelated or unrelated to these holidays. So, or example,purchases o groceries and other essential goods areincluded. This inclusion o both kinds o purchases isa practical consideration because o the diculty o separating one type o purchase rom the other.
Online holiday sales growth will come at the expense o in-store sales
. Online holiday sales are expected to grow 16.8%compared with last year’s sales, while total retail sales (onlineand ofine) are orecast to increase by only 3% this holidayseason. This disparity is a result o consumers moving purchasedollars rom physical stores to the web. This trend was seen ina pre-holiday Nielsen survey that ound while only 5% o onlineconsumers planned to spend more dollars on holiday gits in2011 compared to a year ago, two to three times as many o these consumers planned to increase their holiday spending onthe internet this year compared to last year.
Online holiday shopping has become mainstream.
 Nearly hal o all online consumers are expected to buy gitson the internet this holiday season. Consumers across allincome levels will seek the convenience and money-savingopportunities o online shopping. In all likelihood, onlineholiday shoppers will purchase more gits on the internet thanin clothing, home electronics or toy stores.
The internet is especially well suited or holiday gitbuying.
In 2010, online holiday season sales accounted or7.4% o total retail sales—a rate that will likely exceed 8%in 2011. But when purchases unrelated to the holidays arestripped out, the share o online holiday season sales risesconsiderable. In pre-holiday surveys consumers said theywould spend around 33% o their git dollars on the internetthis year. This reveals how the internet has become anindispensable tool or comparing prices, discovering git ideasand nding popular items that are out o stock in local stores.
Many consumers are planning to buy online to avoidcrowded stores.
Tired o the renzied ritual o in-storeholiday shopping—particularly Black Friday “door-buster”deals—consumers are choosing to do more git buying online.Retailers are responding with online deals that meet or beattheir in-store oers. Moreover, retailers are posting theironline Black Friday deals on Thanksgiving Day. As a result,the traditionally amily-centered holiday has turned into amajor online shopping event. Last year, ecommerce saleson Thanksgiving Day grew by 28% over the previous year,according to comScore.
Afuent consumers uel online holiday sales growth.
Upscale consumers are avid and sophisticated online deal-seekers,as evidenced by their use o digital coupons, social media andBlack Friday sites. Higher-income consumers are more involvedwith online holiday shopping than lower-income shoppers onseveral counts: They are more likely to make holiday purchasesonline and spend a greater share o their total git budget withweb retailers.
Smartphones and tablets are boosting holidayecommerce sales.
Mobile devices create opportunitiesto divert what might have been an in-store purchase intoan online sale. For example, when consumers use theirsmartphones to look up inormation about a product whilein a store, they oten end up buying it online rom anotherretailer. And one o the main reasons consumers use tabletsor holiday shopping is to avoid crowded stores.
 
Online Holiday Sales Forecast:
Savings and Convenience Will Drive Strong Sales
 
Copyright ©2011 eMarketer, Inc. All rights reserved.
3
Retail Holiday Sales Outlook
Consumers are expected to hold back on holidayspending this year because o rising ood, gas andutility prices as well as concerns about the economy.Several pre-holiday surveys conrmed shoppers’intentions to spend either the same or less onpurchases during the 2011 holiday vs. last year.No more than 12% o online consumers said theyexpected to increase their holiday spending this year.
% of respondents
Comparative Estimates: Change in Planned HolidaySpending Among US Internet Users, 2011 vs. 2010
Accenture, Sep 2011Deloitte, Oct 2011Kantar Retail*, Aug 2011BIGinsight, Sep 2011Nielsen, Sep 2011
More
12%10%9%6%5%
Same
66%49%50%32%48%
Less
22%42%35%39%36%
Too earlyto know
---23%-
Do not buyholiday gifts
--6%-10%
**
Note: numbers may not add up to 100% due to rounding; *among consumers; **or undecided Source: various, as noted, 2011
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It is no surprise then that leading retail research and tradeorganizations are predicting retail industry sales will grow at amodest 2.5% to 3.5% rate this holiday season.
% change vs. prior year 
Comparative Estimates: US Holiday Season RetailSales Growth, 2011
International Council of Shopping Centers (ICSC), Sep 20113.5%ShopperTrak, Sep 20113.0%Deloitte*, Sep 20112.5%-3.0%Kantar Retail**, Sep 20112.8%NRF, Oct 20112.8%
Note: sales are for Nov and Dec unless otherwise stated and exclude automotive dealers, gas stations and restaurants; *sales are for Nov-Jan;**sales are for Oct-Dec Source: various, as noted, 2011
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This is a sharp drop rom last season’s 5.2% growth rate asestimated by the National Retail Federation, based on USDepartment o Commerce data. Pent-up demand and weak2009 holiday sales contributed to the strong perormance lastholiday season. Still, the NRF’s 2.8% orecast rate is slightlyhigher than the organization’s 10-year average holiday salesincrease o 2.6%.
% change
US Holiday Sales Growth, 2006-2011
20063.1%20071.8%2008-4.4%
-0.4%
20105.2%2011*2.8%
Note: *forecast  Source: National Retail Federation (NRF) derived from US Department of Commerce data, Oct 6, 2011
133726 www.
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2009
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Online Holiday Sales Forecast
Against this backdrop, online holiday sales (excluding travel) will rise16.8% this year—six times higher than total industry growth—toreach $46.7 billion. This marks three years o strong online holidaysales and demonstrates the web’s ability to help consumersachieve their holiday git buying goals in a weak economy.
billions and % change
US Retail Ecommerce Holiday Season Sales, 2006-2011
2006$26.42007$31.619.4%$29.1-7.8%2009$34.016.9%2010$39.917.4%2011$46.716.8%Retail ecommerce sales% change
Note: sales are for Nov and Dec of each year; excludes online travel, event ticket and digital download sales Source: eMarketer, Nov 2011
133717 www.
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2008
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