Posted October 2, 2007 9:06 am by with 4 comments

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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?

  • That makes depressing reading. It does not however gel with the Dow Jones Index. There is buoyancy in the stock market which is not reflected in retail projections. Things are a bit confused just now, but I think that before peak shopping time, optimism will return.

  • every year these numbers go up… its no surprise to me 🙂

  • It almost seems old fashioned to go to your local mall for holiday shopping. In about 2 hours time, I can find tailored presents for all my friends and family WITHOUT leaving my home. It seems like the only that stores are good for now is to give gift ideas you can use for your online shopping.

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