November 17, 2010 / 12:11 AM / 9 years ago

Online holiday sales growth seen doubling

SAN FRANCISCO (Reuters) - Online spending this holiday season, driven by hard-to-resist deals, is expected to grow by at least 9 percent, twice last year’s pace, analytics firm comScore said on Tuesday.

The influential research house told Reuters it raised its forecast for spending during November and December from a previous forecast of 7 to 9 percent growth after tracking continued strength in consumer-spending growth rates throughout October.

That acceleration in spending comes as retailers from to Wal-Mart battle to entice shoppers with competing deals.

In October, comScore had cautioned that any negative changes to the unemployment rate, price inflation or deterioration in the stock market would weigh on spending.

October is a key predictive month for shopping trends during the holidays. Once data from early November is tracked, the new forecast could potentially increase further, executives said.

This month, comScore said U.S. online spending during the third quarter rose 9 percent, marking the fourth straight quarter of year-over-year growth since the economic downturn that sharply curtailed consumer spending from late 2008.

E-commerce spending in the United States rose 4 percent in November and December of 2009.

Online sales growth typically outpaces that of brick-and-mortar retail, where growth has languished this fall.

The National Retail Federation is expecting 2010 holiday retail sales, which exclude online sales, to rise by 2.3 percent this year to $447.1 billion, compared with a rise of 0.4 percent last year.


While e-commerce still accounts for only about 7 percent of total retail sales — excluding food, gasoline and vehicle sales — according to comScore, it has continued to gain momentum with time-constrained shoppers who are increasingly on the hunt for deals.

The double-digit growth rates of online-only sites like have pressured traditional retailers such as Wal-Mart Stores Inc, who are beefing up their online units in order to compete.

Last week, Wal-Mart said it would offer free shipping on electronics and thousands of other items for the holiday season — a promotion Amazon said it would match, noting that it already offers free shipping for items over $25.

Analysts believe retailers both online and off will strive to offer a host of incentives this holiday season from free shipping and returns to gift-wrapping, first-rate customer service and special limited-offer deals — all designed to encourage more sales and beat the competition.

Retailers from Target to Toys “R” Us have already announced steep “door-buster” online sales on products well in advance of Black Friday, the day after Thanksgiving considered the historical kickoff to the holiday shopping season.

Editing by Edwin Chan, Phil Berlowitz

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