September 21, 2010, 11:16 AM

E-retailers are cautiously optimistic about the holiday season

79% expect sales to increase, but nearly half expect no more than 10% growth.

Don Davis

Editor in Chief

Lead Photo

Lauren Freedman, president of The E-tailing Group.

Most online retailers expect they will sell more this holiday season than last, but only 31% project growth of more than 10%, according to a survey of more than 250 e-retailers by market research and consulting firm The E-tailing Group.

“Respondents confirm that e-tailers have a cautious yet positive mindset and are prepared to meet the challenges ahead,” says Lauren Freedman, president of The E-tailing Group.

The survey, released today, found:

 

 

• 61% of e-retailers surveyed describe themselves as cautiously optimistic about the upcoming holiday season, and 18% say they are optimistic. 9% are somewhat pessimistic and 2% pessimistic, with the remaining 10% characterized as unchanged in their expectations.

• 79% expect their sales to grow, but most of them project growth of no more than 10%. Here’s the breakdown of the 79% who expect higher sales:  1-5%, 22%; 6-10% 26%; 11-20%, 17%; 21-30%, 8%; 31% or more, 6%. 12% expect sales to be flat and 9% believe sales will decline relative to the 2009 season.

• 85% will make some free shipping offers this holiday season. Here’s the breakdown: unconditional free shipping the entire season, 13%; unconditional free shipping at times during the season, 26%; free shipping on certain products throughout the season, 27%; free shipping on certain products at times during the season, 19%.

• 38% have mobile initiatives planned for the season, breaking down as follows: mobile site with shopping cart, 25%; will text message about sales or specials, 8%; information-only mobile site, such as one offering ratings and reviews, 8%; mobile app only, 6%. Retailers could have multiple responses in this category.

• 91% of retailers responding will market through social networks this holiday season. 37% will market more aggressively than they did in 2009 through both Facebook and Twitter; 14% have more extensive plans, focusing on Facebook; 17% will do more and focus on Facebook, including integrating the “Like” button into their sites; 9% plan about the same amount of social marketing, with a focus on Facebook; and 13% will maintain their social marketing efforts, and have plans for both Facebook and Twitter. 1% say they plan to do less on Facebook or Twitter, and 9% have no social strategies in place.

Comments | 3 Responses

  • Thanks for this report Don and Lauren. Every time I see free shipping it stumps me. Real free shipping cuts way into profit margins and can be adverse to profits. Will the free shipping discounts add into the product price? It's a hot way to draw in more sales, but if you're then making a penny on the dollar, a 10% increase in sales (or a 15% increase as reported by Deloitte LLP) doesn't really translate into success during the holidays. How do merchants navigate this fine line?

    • Andrew, Thanks for your note. Check out how some retailers are managing free-shipping strategies in a recent article we published. Here's the link: http://www.internetretailer.com/2010/09/15/does-free-shipping-pa --Paul Demery

  • Thanks!

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