Online Retailers: An Early Holiday Peak?
Aggressive, early discounts by e-tailers prompted heavy buying through “Cyber Monday,” but consumer holiday spending could falter overall
What began as a strong shopping season for online retailers may fizzle as cash-strapped consumers quickly exhaust tight holiday budgets.
Lured by steep discounts, consumers showed a propensity to spend as yearend shopping got under way after Thanksgiving. By late afternoon on Nov. 30, the day’s online sales were up 11% from a year earlier, according to online marketing firm Coremetrics. That matched the percentage increase registered on Nov. 27, the day after Thanksgiving, when Web sales climbed 11%, to $595 million, according to researcher comScore (SCOR).
With unemployment high and expected to keep rising, households are setting aside less money for yearend holiday shopping. That means the late-November shopping surge may not last, retailing experts say. “People could be spending a lot of their budget up front,” says Jeffrey Grau, senior analyst at online marketing research firm eMarketer. “Things are going to slow down as people have less money to spend, and they are going to exhaust their money earlier.” The average consumer plans to spend $682.74 on goods purchased online and offline during the holidays. That’s 3.3% less than last year, according to a National Retail Federation
Deeper, Wider Discounts This Year
To encourage further spending, retailers may have to resort to even deeper discounts, which can crimp margins and reduce revenues. More than 70% of holiday shoppers will purchase from discounters this year, according to the NRF. The home page for JCPenney.com (JCP) boasted “30,000 deals” and said that Nov. 30 would be the last day shoppers could receive free shipping on purchases of at least $25. During the week that included Nov. 27, dubbed Black Friday, retailers cut prices on LCD TVs by an average of 22% from earlier in November. As a result, sales of those sets rose 6% from a year earlier, according to consultant iSuppli.
Early discounting was rampant. At retailers including Amazon.com (AMZN), Best Buy (BBY), WalMart (WMT), and Target (TGT), price cuts on Apple (AAPL) products “were more aggressive than usual, with discounts as much as 20% vs. previous years’ [cuts] of 11% to 13%,” wrote Shaw Wu, an analyst at Kaufman Brothers, in a Nov. 30 report. Compared with last year, when the U.S. economy was still in recession, “more items will be on sale” this holiday season, says Scott Silverman, executive director of Shop.org, a division of NRF. “Across the board, we’ll see a higher percentage off.”
source: businessweek
Related Posts:
- Small Retailers Push for Online Sales The holiday outlook is gloomy, but online retailers can react...
- Holiday Retail: Winners and Losers Parents will still shop for kids’ presents, but even the...
- Retail: The Great Holiday Blowout Sale From Neiman Marcus to Old Navy, no one’s immune to...
- Recession forcing retailers to think small The Great Recession and Americans’ retreat into thriftiness are teaching...
- SME Retailers Restructuring Operations The global downturn dealt a severe blow to the Indian...
- TwtQpon Throws A Free Bone To Struggling Retailers Dell made a cool $1 million over the holidays by...
- Big Retailers Still Struggle in India Most Indians continue to find big retail stores more interesting...
- Why eBay’s recent search outage is GREAT news for you If you were on eBay last Saturday Nov. 21st, you...
- Holiday apartments and villas for sale in Javea A man feels pleasure after purchasing apartment for sale in...
- Take Advantage of the ‘Back to School’ Traffic Peak Many webmasters fail to take advantage of seasonal traffic peaks,...
- Early Q4 Apple Mac, iPod Sales Estimates Beating Expectations (AAPL) Another sign that Apple’s (AAPL) not taking a hit from...
- Making Money Online with Affiliate Marketing and Clickbank Everyone wants to know how to make money online because...
- Earn A Regular Free Money Online By Doing Online Jobs Some months back I asked a non-working friend of mine,...
- Make Money Online Scams Many people go online in search of easy money, but...
- Obama Spent $3.5 Million in Online Advertising, Most of it on Google In yet another sign that online has become a dominant...
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Once More Musicians and Fans Will Get the Shaft
AT&T Lets You Access Your Social Networks With New Mobile App
Apple's CEO Conundrum
The Google Ventures Cheat Sheet
Comments
No comments yet.
Leave a comment