Retail's Big Opportunity: Online Sales

Several recent surveys are pointing in one direction: there will be big opportunities for retailers this holiday season online.

Woman on her laptop in a cafe.
Woman on her laptop in a cafe.

Even though the economy is slowly improving, market researcher NPD Group has found consumers are still beginning their shopping online.

"Forty-four percent of consumers told NPD they plan to look around for the best price and value before they buy, which could benefit online sales," said Marshal Cohen, chief industry analyst at NPD. "As consumers 'pre-search' by scouring Web sites for the best prices and deals, they will likely discover that shopping online offers not only competitive prices, but a whole lot more convenience and they decide to buy online."

The value of shopping online will likely be enhanced by numerous expected "free shipping" offers. During the back-to-school shopping season, there were several retailers offering "free shipping" with either a very low minimum purchase or no restrictions at all. Kevin Strawbridge, president of online coupon Web site, expects to see this trend again during the holidays.

In recent months, retailers have been stressing the importance of having an integrated approach to retailing, and that means the ability to provide a seamless experience whether the customer is shopping online or in the store, or even on their phone.

That manifests itself in a variety of ways, but one common way is allowing consumers to order a product online and pick it up in the store. Many stores are now offering this service, from Nordstrom to Best Buyto Walmart.

The other thing that can't be forgotten is mobile.

The National Retail Federation said its research shows one-fourth of Americans with a smartphonewill use it to shop for gifts, compare prices, and research product reviews.

But it's not just about finding the lowest price. NRF spokeswoman Ellen Davis notedin her blogthat online shoppers spend more and start shopping earlier.

According to the NRF's survey, online shoppers will spend 24.6 percent more during the holidays than average adults, or about $858.49 versus $688.87 for all adults.

What's more, about 42.6 percent of online shoppers will start shopping before Halloween.

Those shoppers also are more likely to pick up something for themselves, with about 61.4 percent of online shoppers treating themselves to a purchase, compared with 57.1 percent to adults in general.

While some of those shoppers have already begun to make their holiday purchases, the first full week in December is more vital to the online business, according to research from Marin Software, a provider of paid search management tools.

During the December "peak week" in 2009, paid search campaigns run by leading retailers registered the highest cumulative results for all of November and December with 24 percent of impressions (or people viewing the link), 18 percent of all clicks, and 25 percent of profits, Marin said.

Online shoppers also are the busiest Sundaysthroughout the holiday season, Marin said.

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