October 27, 2010, 2:40 PM

Online shoppers will start early and expect more this holiday season

E-retailers should offer early-season discounts and promotions, a survey suggest.

Allison Enright

Editor

Lead Photo

More consumers will do their holiday shopping online this year and a greater number intend to complete their shopping early in the season, according to a new survey. Consumers also say they want retailers to vie for their business with discounts and promotions.

Those results suggest e-retailers need to put forth their best offers early to capture the greatest sales, says Ken Burke, founder and chairman of e-commerce service provider MarketLive Inc., which sponsored the 2010 Mindset of a Multichannel Shopper Survey conducted by e-commerce consultancy The E-tailing Group.

The survey of 1,000 online consumers finds 44% of respondents say they will do their holiday gift buying online, compared with the 37% who said so in last year’s survey. 39% say they intend to finish their holiday shopping by early December, greater than the 29% who planned to be done by Dec. 3 last year.

“Holiday shopping will happen a little early this year,” Burke says. He says during the last two years holiday shoppers contended with low inventory levels and often couldn’t find gifts they wanted, and that experience will lead consumers to search for gifts earlier. “The stock issue has made shoppers more hyper-sensitive and is pushing them to buy earlier,” he says.

Improved economic stability may mean consumers feel more confident in making early purchases, but he adds that holiday shoppers still want the most value for their money, which means retailers must offer deals and promotions to secure sales.

45% of the respondents to the MarketLive survey say they will not pay full price for gifts this season.  “The early purchaser level tells us that we have to merchandise sites for more immediacy,” Burke says. “We have to pay attention to what we’re doing and not save our best offers for later in the season.”

Free shipping (92%) and free returns (81%) are the top promotions that influence shoppers to buy, according to the survey.

Burke says he understands that e-retailers may be reluctant to offer too much too early in the season, but adds that the research suggests e-retailers must do more than in the past to persuade consumers to buy from them and not competitors, especially early on.

“I know the downside of giving margin away too early in the season. But the data says consumers are different this year,” he says. Some respondents say they desire to remain loyal to retailers or brands, but 61% said they’d go to a competitor’s site if they encountered out-of-stock items.  “We’re seeing a shopper more fickle than in the past. They are a little tougher. It may be a little more promotional than e-retailers want it to be, but it is going to be necessary to get the person to purchase.”

The research also revealed that 74% of respondents will buy gift cards as gifts this year. A majority of those respondents say they will spend anywhere from 11% to 50% of their total gift budgets on those cards. “It is pretty clear that gift cards still are the shining stars of the online space,” he says.

With so many shoppers turning to gift cards, Burke says e-retailers should promote their availability. He recommends e-retailers put information about them in standard places on home pages and in banners embedded within e-mail messages, and to do so now so that consumers know where to find them. He also suggests inserting gift card information on checkout pages and in post-purchase e-mails.

A separate projection this week from research firm eMarketer anticipates that e-retail sales will increase 13.7% from the same time last year and account for $51.4 billion in spending during the fourth quarter. That forecast is in the mid-range of other online holiday sales predictions.

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