Tuesday, November 3, 2009

Web Remains Retail Industry's "Growth Engine" This Holiday

With overall retail sales expected to show no gain this holiday shopping season, online retail sales in the US will reach $44.7 billion this holiday season, an eight percent increase over last year, according to a new forecast by Forrester Research, Inc.. The growth rate represents an increase from 2008, when, on the heels of the worst of the global financial crisis, online holiday retail sales in the US grew just five percent. Forrester defines the holiday shopping season as the months of November and December.

The National Retail Federation has forecast a one percent decline in overall US holiday retail sales for this year. A recent Forrester survey of more than 4,000 US online consumers showed that 94 percent of those who made a purchase online within the past three months plan to continue to buy online this holiday season. And 72 percent of retailers surveyed in "The State Of Retailing Online," a Shop.org study conducted by Forrester in Q3 of this year, say they expect online holiday sales to increase over last year.

As outlined in the new Forrester report "US Online Holiday Retail Forecast, 2009," online retailers will strive to balance consumer demand this holiday with profitability. Improving margins is in; chasing sales is so last year. The change in strategy will manifest itself in a number of different ways, including more limited-time and limited-quantity sales as retailers seek to reduce across-the-board discounting. Retailers will also cut down on automatic free shipping and institute price thresholds to qualify for free shipping. Customer engagement is also a priority this holiday: Expect to see online retailers deploy more cross-channel customer service options, advanced merchandizing software that will provide more product information, and enhanced social networking tools that will enable consumers to share purchase decisions with friends.

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