November 9, 2010, 3:29 PM

Online holiday sales are set to rise 16% this year

A Forrester study also projects a 12% increase in consumers’ average order.

Thad Rueter

Senior Editor

Lead Photo

Online retail sales this holiday season will increase nearly 16% year over year in the United States, thanks in part to spending by affluent consumers, according to a projection released today by Forrester Research Inc.

Consumers in November and December will spend $51.7 billion for online purchases,  up 15.7% from $44.7 billion for the same period last year, according to the report, “U.S. Online Holiday Retail Forecast 2010,” written by Forrester analyst Sucharita Mulpuru. The forecast predicts that overall holiday retail sales will increase 13%, the report says.

Much of the growth for online holiday sales this year will come from affluent buyers, the report says. 87% of U.S. consumers who make at least $100,000 a year plan to spend more or the same amount of money online as they did last year. Consumers earning less are less likely to spend as much online this year as last year.

“As affluent online buyers bring more purchasing power to the net than other income groups, this difference in response supports our robust growth forecast,” Mulpuru writes.

U.S. consumers shopping online will spend an average of $338 in November and December, up 11.6% from $303 in 2009, the report adds. And those online shoppers could receive more holiday promotional messages from retailers as Christmas nears. Out of 64 U.S. retailers surveyed, 40 plan to spend more on holiday marketing messages this year compared with a year ago. Additionally, 34 retailers will offer buy one, get one free or similar deep discounts.

“Retailers must expect heavy price-based competition this season and be prepared to pay,” Mulpuru writes.

Free shipping represents one of the most important retail battlegrounds this year, Forrester says. ShopRunner, a new free-shipping program backed by GSI Commerce, aims to give Amazon Prime more competition, and 31% of U.S. online shoppers hold out for free shipping offers before making purchases, Forrester says.

Comments | 1 Response

  • Optimizing ecommerce websites is the key to success and staying ahead of competition, especially during the holiday season. While focus on traffic and search is important, the real measurement lies in converting browsers to buyers. Websites that are continuously optimized to yield up to 400% increases in conversion, but many retailers are not yet taking advantage of these technologies. The revenue opportunity is too great to ignore the testing and website personalization culture, for any online retailer--whether it's during the holiday season or not.

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