Technology | Media | Telecommunications

Saturday, November 19, 2011

U.S. Consumer Online Shopping to Reach $195 Billion


Americans are expected to hold back on their winter holiday shopping spend this year, because of rising prices for basic commodities such as food and utility services -- as well as their concerns about the overall economy.

In fact, several pre-holiday surveys have already confirmed that shoppers intend to spend either the same or less on purchases during the 2011 holiday season, when compared to last year.

That being said, the convenience and anticipated cost-savings from online shopping will likely bring more people on the web for the holidays -- spending a greater share of their gift budget with a variety of online retailers.

eMarketer estimates that U.S. retail ecommerce holiday-season sales, which include all retail ecommerce sales during November and December, will rise by 16.8 percent this year to $46.7 billion.

"This marks three years of strong online holiday sales and demonstrates the web’s ability to help consumers achieve their holiday gift buying goals in a weak economy," said Jeffrey Grau, eMarketer principal analyst. "Strong online holiday spending, in turn, will boost ecommerce sales to $195 billion for the whole year, up 16.5 percent over 2010."

As a result of strong growth, the online share of total retail sales is gradually increasing, with the biggest gains taking place during the holiday season.

Overall retail sales growth during the holiday season is expected to be lackluster compared to online ecommerce: mainstream retailer estimates range between 2.5 and 3.5 percent in their growth projections for total holiday retail sales this year.

Ecommerce is not immune to economic downturns, but it is more insulated than the overall retail industry. Price-sensitive consumers view online shopping as a way to find better prices and reduce gas expenses.

Many of them plan to increase their holiday purchases online. But even shoppers who intend to buy in-store -- after doing online research -- may ultimately purchase from retail sites that offers better deals.

Moreover, some savvy shoppers will likely use their smartphones to check prices or read product reviews while in transit to local retailers, and thereby influence their final purchase outcome.