It might not be an especially cheery holiday for retailers this year – at least offline retailers. TNS Retail Forward, a company that conducts research on the retail market, says growth in holiday sales will be the slowest it has been in five years. The forecast? Fourth-quarter growth in 2007 will slow to 3.3% – it was at 4.6% in 2006. But it is still growth. However, their projection for online sales is rosier. They expect online sales to bring in nearly $42 billion in the fourth quarter of 2007. That’s up 7 billion from last year when it sales were at $35 billion in the fourth quarter.
Four-fifths of US consumers said they expect to research gifts online, according to BurstMedia. “The company also found that more than one-half of adult Internet users expected to make a holiday gift purchase online, up from 37.6% who did so in 2006,” according to the article on emarketer. Half of people who have internet access will buy gifts online this year. That is especially encouraging.
Not only that, but the customers are ready to spend about 42.5% of their holiday budget on the Internet. Also, the wealthier your customers, the less they are affected by downturn. This is probably not lost on retailers like Blue Nile and others who market high end products online.
The poor sales in the offline world are due to the credit issues that are affecting the retail market, especially home improvement and catalog sales. If the credit problems get worse, so could the projections. Online shopping is definitely on my list this year. How about yours?