In its second-largest acquisition, Amazon buys the company for $970 million.
A number of researchers have issued their holiday sales predictions and while the numbers differ, they all agree that online retailing will experience strong growth over last year.
It’s not that retail experts set out to confuse, but as online holiday sales forecasts of different research firms start to pile up, it could just happen anyway. Some companies go right to the bottom line and forecast dollars. Others also handicap the impact of various trends and the likely success-or not-of various marketing tactics. Each company has a carefully honed methodology and rationale to support its holiday predictions, leading to a cornucopia of conclusions. The good news for e-retailers is that, differing details aside, the common general theme is that the holiday season online this year will be even better than last year.
ComScore Networks Inc. projects that fourth quarter online sales will reach $13.8 billion, up 27% over fourth quarter sales in 2001. ComScore predicts a peak sale day of $350 million, up from last year’s peak sale day of $262 million, and bigger spikes in daily sales than last year due to a later Thanksgiving and a shortened holiday shopping season as a result. ComScore’s sales projections cover all online sales of merchandise, including event tickets, and exclude travel, auction sales and automobiles.
Nielsen/Net Ratings doesn’t project sales volumes, but it’s already forecasting a holiday season and an online retail climate that will look much like last year’s online and is urging retailers to plan accordingly. Noting that holiday sales online took a hit last year from “phenomenal” discounts offered in stores, it’s warning e-retailers to price carefully and not rely solely on free shipping as a way to get shoppers to buy online. With the growing number of lower-income households now shopping online and lowered consumer confidence, online shoppers will be looking for value, notes the company. “E-retailers can position themselves early with strategic sales and promotions,” says Lisa Strand, director and chief analyst, Nielsen/NetRatings.
Retail Forward Inc. projects that retail e-commerce sales will approach $13 billion in the fourth quarter, compared with $11.2 billion in the fourth quarter of last year, an increase of better than 15% year over year. “From an economic standpoint, one of the things that is encouraging for e-retailers this year is that when you look at last year, some of the non-store numbers (defined as Internet and catalog sales) were dampened by lingering anthrax scares,” says Frank Badillo, vice president and senior economist at Retail Forward. “That partly explained why store sales bounced back a little more vigorously than people expected last year. The fact that we’ve seen those scares go away and that we’ve seen catalog sales bounce back pretty well since spring bodes well for online retailers. Consumers should feel pretty good about ordering online this year.” In fact, Badillo forecasts weaker growth of some store sales as shoppers get more confident about ordering online and by catalog.