"Given the current economic environment, it is no surprise that consumers are reigning in their spending and seeking bargains," says Lynn Franco, Director of The Conference Board Consumer Research Center. "Free shipping, exclusive online deals, coupons and discounts are among the incentives consumers will be expecting this season." Bargain hunting will remain the driving force behind online sales, the report notes.
Consumers to Reduce In-Store Spending; Planned Online Shopping Shows Slight Increase
Even though online shoppers plan to spend less in stores this holiday season, planned spending online is up slightly, compared to the same quarter last year. Online households planning to spend more than $500 in stores declined to 16 percent from 21 percent last year. Those planning to spend more than $500 online rose to 5 percent from 4 percent last season. Those planning to spend between $100 and $499 in stores declined to 57 percent from 61 percent last year, while those planning to spend that amount online edged up to 36 percent from 35 percent last year. Online households planning to spend less than $100 in stores increased to 22 percent from 16 percent last year. Those planning to spend that amount online rose to 32 percent from 29 percent.
"Despite slowing retail sales in many channels this holiday season, online shopping is likely to be one of the few bright spots this holiday season," reports Mary Brett Whitfield, Director of the Retail Forward Intelligence System™ of TNS Retail Forward. Online sales across retail channels are forecast to grow 9 percent this holiday season, compared with a total retail sales forecast of just 1.5 percent growth this year in the key holiday shopping retail sectors. TNS Retail Forward forecasts online sales to reach $42.5 billion in the fourth quarter, up $3.5 billion from last year. "The convenience of shopping online still resonates with many holiday shoppers, even in a slow economy," adds Whitfield.
Retail and Catalogue Sites Most Popular
This holiday season, books, clothes, movies and toys will be the most popular items on the consumer's Internet shopping list. The most preferred shopping sites are those operated by retail store and catalogue operators such as Walmart.com or BestBuy.com, followed by online retailers such as Amazon.com and online auction sites such as EBay.com.
Women shoppers are shifting from retail and catalogue sites to online retailers this year, perhaps in search of better prices. Female shoppers who preferred retail and catalogue sites dropped to 42 percent from 48 percent in 2007, while female shoppers who prefer online retailers have grown to 40 percent from 34 percent last year. Site preferences for male shoppers only changed slightly.
Shopping Habits Differ Among Genders
Consumers are very aware of the cost benefits between shopping in stores and online. Self-identified bargain hunters account for 44 percent of shoppers who made an online purchase in the past three months, the same as a year ago. Die-hard Internet shoppers have increased slightly and represent 17 percent of shoppers. They are the second most common type of Internet shopper. Traditional shoppers, who occasionally shop online but prefer the familiarity of real stores, account for about 15 percent of online shoppers. Last resort shoppers, who buy online only when products are unavailable in stores, rank fourth on the list and represent 14 percent of online shoppers. Lastly, hurried shoppers, who point and click only when pressed for time, represent 10 percent of online shoppers.
Among bargain hunters, men are more likely than women to surf the Internet searching for deals. Only 41 percent of women compared with 48 percent of men are self-proclaimed bargain hunters. Last resort shoppers and hurried shoppers, however, are more likely to be women. About the same proportion of men and women are Internet die-hards and traditional shoppers.
Consumers More Cost Conscious
Shipping charges, which are the most frustrating aspect of online shopping, tend to frustrate women more than men, 47 percent versus 38 percent respectively. The ongoing sentiment among online holiday shoppers is that free shipping, coupons and discount offers would encourage them to spend more online. About 93 percent of women versus 87 percent of men say free shipping would serve as a motivation to spend more online this holiday season. More than 71 percent said special offers and deals not available in stores would boost their online spending, with little difference between men and women. More than 70 percent of women and 68 percent of men said they would be willing to spend more if merchants offered coupons/discounts. In concert with shipping cost frustrations, 48 percent of women say they would spend more online if sites offered free return postage, compared with 39 percent of men who felt this way.
